5 Best Leveraged ETF Areas of Last Week
Zacks Investment Research | Apr 20, 2020 08:00AM ET
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 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)’ ABT has launched its third COVID-19 test.
Then there are health-care giants like Johnson & Johnson (NYSE:JNJ) Biotech Stocks, ETFs to Gain on COVID-19 Vaccine & Drug Progress ).
Naturally, funds like Direxion Daily S&P Biotech 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. on better-than-expected first-quarter results. The chip maker’s guidance for the second quarter was also upbeat.
Chinese regulators approved Nvidia’s 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%).
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Consumer Staples
Though America is planning a reopening, a return to complete normalcy will take time 2 Agricultural ETFs Benefit From the Coronavirus Scare ).
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