5 Best Leveraged ETF Areas of Last Week

Last week was favorable for Wall Street with the S&P 500, the Dow Jones and the Nasdaq returning about 3%, 2.2% and 6.1%, respectively. Hopes of American businesses reopening, moderation in new virus cases and chances of treatment coming on stream kept markets in the positive territory.

However, if investors can identify the trending investing area amid all this coronavirus chaos, they can easily take a leveraged position on that and book sturdy profits in a short span.

Keeping this in mind, below we highlight a few leveraged ETF areas that were among the toppers last week.

FANG+

The NYSE FANG+ Index includes 10 highly liquid stocks that make up a segment of the technology and consumer discretionary sectors consisting of highly traded growth stocks of technology and tech-enabled companies. These stocks are Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Alphabet (NASDAQ:GOOGL), Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), Nvidia, Tesla (NASDAQ:TSLA) and Twitter.

These stocks have been rallying lately as the coronavirus fear has charged up the tech and Internet sector. Global lockdowns have left people binge-watching and benefited media-services provider and production company Netflix. At the same time, widespread work-and-learn-from-home has favored cloud businesses of Microsoft (NASDAQ:MSFT), Amazon, Apple and Alphabet. Also, Amazon and Alibaba gained from online shopping.

As a result, MicroSectors FANG+ Index 3X Inverse Leveraged ETN FNGU (up 35%) and MicroSectors FANG+ Index 2X Leveraged ETN FNGO (up 22.8%) were the winners last week.

Biotech

Stocks of medical companies that make testing kits and are developing the treatment and vaccine to fight COVID-19 have gained immensely this year. Gilead Sciences (NASDAQ:GILD)’ GILD antiviral medicine remdesivir has been receiving positive response in clinical trials in some COVID-19 patients. Plus, Abbott ABT has launched its third COVID-19 test.

Then there are health-care giants like Johnson & Johnson (NYSE:JNJ) JNJ which are trying to come up with a vaccine. Pfizer Inc. (NYSE:PFE) PFE too informed about its plan to support the development and distribution of BioNTech SE’s BNTX COVID-19 vaccine candidate.Then there is Sanofi (PA:SASY) SNY, which in collaboration with BARDA, is working to test a preclinical vaccine candidate using its recombinant DNA platform (read: Biotech Stocks, ETFs to Gain on COVID-19 Vaccine & Drug Progress).

Naturally, funds like Direxion Daily S&P Biotech Bull 3x Shares LABU (up 30.2%) and Direxion Daily Healthcare Bull 3x Shares CURE (up 18.8%) had every reason to rally last week.

Semiconductor

Last week was full of good news for the chip space. Samsung (KS:005930) announced that it has teamed up with chipmaker Xilinx’s adaptive compute acceleration platform (ACAP) for 5G deployments. Then Taiwan Semiconductor Manufacturing’s TSM shares gained on better-than-expected first-quarter results. The chip maker’s guidance for the second quarter was also upbeat.

Chinese regulators approved Nvidia’s NVDA $6.9 billion acquisition of high-performance interconnect provider Israel-based Mellanox, announced in March 2019. The acquisition is likely to be immediately accretive to NVIDIA’s non-GAAP gross margin, non-GAAP EPS and free cash flow. European regulators cleared the buyout in December.

If these were not enough, could computing — a hot area in the coronavirus-stricken economy —has been driving demand for chips. Direxion Daily Semiconductor Bull 3x Shares SOXL added 18.8% last week.

Consumer Discretionary

The impending reopening of the U.S. economy as well as the massive Fed and U.S. government stimulus has given the sector a fresh lease of life. Direxion Daily Consumer Discretionary Bull 3X Shares WANT gained 17.3% last week. The underlying index of the fund is heavy on Amazon (23.6%), followed by Home Depot (NYSE:HD) (9.88%), McDonald’s (NYSE:MCD) (6.18%), Nike (NYSE:NKE) (5.24%) and Starbucks (NASDAQ:SBUX) (4.31%).

Consumer Staples

Though America is planning a reopening, a return to complete normalcy will take time as reopening varies from state to state and comes with certain conditions. So, investors can expect panic buying of essential items to remain in place for a few more weeks, if the situation does not worsen. Probably because of this reason, Direxion Daily Consumer Staples Bull 3X Shares NEED (11.5%) fared better last week (read: 2 Agricultural ETFs Benefit From the Coronavirus Scare).

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