Best & Worst Leveraged ETFs Of Last Week

Last week was spectacular for the stock market despite the rapid spread of coronavirus. Key U.S. indexes hit fresh highs. SPDR S&P 500 ETF Trust (ASX:SPY) , SPDR Dow Jones Industrial Average (NYSE:DIA) ETF Trust (TSXV:DIA) and Invesco QQQ Trust QQQ added about 3.3%, 3.1% and 4.6%, respectively (as of Feb 7, 2020).

Upbeat U.S. economic datapoints and Chinese stimulus mainly lifted the markets. The reading of U.S. manufacturing sector for the month of January marks the first month of expansion, after five straight months of contraction. The ISM Manufacturing PMI in the United States rose to a reading of 50.9 in January, marking the highest level since July, from an upwardly revised 47.8 in December. The data also compared favorably with economists’ poll of 48.5 for January (read: U.S. Manufacturing Back to Health: ETF Winners & Losers).

Moreover, ISM non-manufacturing and U.S. services PMI surpassed expectations. Strong private payroll report from ADP (NASDAQ:ADP) also boosted market sentiments. Meanwhile, China’s central bank injected 1.7 trillion yuan or $242.74 billion via reverse repos last week. The introduction of fresh stimuli helped China’s stocks to recover from the lowest level in more than four years(read: China ETFs to Gain on New Stimuli to Combat Coronavirus).

Apart from monetary stimulus, China has announced fiscal support too. The emergency policy measures include tax concessions on sectors that are directly affected by the virus like tourism and catering. Companies that manufacture medical supplies and medicines are also excused from taxes and have been allowed government subsidies.

Against this backdrop, we highlight a few leveraged ETFs that stood out as the best performers last week.

Direxion Daily CSI China Internet Index Bull 2X Shares (TSX:CWEB) – Up 12.4% past week

Chinese stimulus lifted hot tech stocks. Notably, the underlying CSI Overseas China Internet Index includes securities primarily listed outside of China, have been listed for at least three months and meet one of the three following criteria: the company is incorporated in mainland China, the operation center for the company is in mainland China; or at least 50% of the revenue from the company is from mainland China (read: 8 Leveraged ETFs That Are Up in Double Digits to Start 2020).

Direxion Daily Healthcare Bull 3X Shares (AS:CURE) – Up 12.0%

No wonder, the coronavirus outbreak made healthcare and biotech companies star performers. The underlying Healthcare Select Sector Index includes companies from the industries like pharmaceuticals, health care providers & services, health care equipment & supplies, biotechnology, life sciences tools & services, and health care technology.

Direxion Daily S&P 500 High Beta Bull 3X Shares HIBL – Up 11.4%

The underlying S&P 500 High Beta Index selects 100 securities to include in the Index from the S&P 500 Index that have had the highest sensitivity to beta over the past 12 months. A Wall Street rally made high-beta stocks winners last week.

Direxion Daily FTSE China Bull 3X Shares YINN – Up 11.2%

The underlying FTSE China 50 Index consists of the 50 largest and most-liquid public Chinese companies currently trading on the Hong Kong Stock Exchange. The rollout of Chinese stimulus explains the rally in the fund.

Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares UBOT – Up 11.5%

The underlying Indxx Global Robotics and Artificial Intelligence Thematic Index provides exposure to companies in developed markets that are expected to benefit from the adoption and utilization of robotics and AI. The space is thriving with emerging possibilities and is likely to fare better on strong fundamentals.

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