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Top Performing Leveraged ETFs

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  • (1:15) - Can This Market Rally Continue?
  • (5:30) - Direxion Daily Homebuilders & Supplies Bull Shares ETF: NAIL
  • (9:15) - Direxion Daily Semiconductor Bull 3X Shares: SOXL
  • (13:25) - Direxion Daily Technology Bull 3X Shares: TECL
  • (16:45) - Direxiion Daily Aerospace & Defense Bull 3x Shares: DFEN
  • (23:20) - How Do Leverage and Inverse ETFs Function?
  •             Podcast@Zacks.com

In this episode of ETF Spotlight, I speak with Sylvia Jablonski, Managing Director at Direxion Investments. Direxion is well known for its leveraged and inverse ETFs

We discuss how leveraged and inverse ETFs work and some of the top performing leveraged ETFs.

Stocks are trading close to their record highs, thanks mainly to optimism regarding US-China trade talks and better-than-expected economic reports. Investors are also less fearful of an impending recession since the yield curve has un-inverted.

Can the rally continue?

The Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL - Free Report) is the best performing ETF this year. It seeks 300% return of the Dow Jones U.S. Select Home Construction Index for a single day. Homebuilders have rebounded strongly this year with falling mortgage rates, low unemployment and rising wages.

The Direxion Daily Semiconductor Bull 3X Shares (SOXL - Free Report) has also been very hot this year despite trade related headwinds as many newer growth areas have emerged for chipmakers, including Autonomous Cars, Cloud Computing, Virtual Reality, Gaming, Wearables, 5G and Internet of Things (IoT). At the same time, chip stocks may remain volatile till the US and China finalize a comprehensive trade deal.

Technology is the best performing sector this year again, up more than 38%, helped by strong gains in Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) . What lies ahead for the Direxion Daily Technology Bull 3X Shares: (TECL - Free Report) ?

The Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN - Free Report) has gained despite Boeing’s (BA - Free Report) woes, as rising geopolitical uncertainty and increased military spending continues to benefit the sector.

Which areas of the market should investors look at now?

These ETFs are designed to achieve their stated performance goal on a daily basis and their performance can differ significantly from their stated daily performance objectives if held for a longer period.

Compounding can have both favorable and adverse effects on the returns. These products perform best in trending markets with low volatility. Tune into the podcast to learn more.

Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.

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