ETFs
5 Best Performing Leveraged ETFs of 1H
Wall Street experienced a remarkable recovery in the first half, supported by enthusiasm for artificial intelligence (AI), hopes for rate cuts, optimism about the resilience of the economy, improving corporate profits. companies and the growing share of the “Magnificent Seven”. “Notably, the technology sector has been the undisputed leader in the market recovery so far this year.
These favorable factors have led to increased demand for leveraged ETFs as investors seek to record large gains in a short period of time. We highlight a set of best-performing leveraged stock ETFs from different market segments, which are leaders in their segments in the first half of the year. These include ETF T-REX 2X Long NVIDIA Daily Target NVDX, ProShares Ultra Semiconductors USD, BMO REX MicroSectors FANG+ Index 3X Leveraged ETN FNGU, 2x Bitcoin Strategy ETF BITX and ProShares UltraPro QQQ TQQQ. These funds will continue to be investors’ darlings, provided sentiments remain bullish.
The Nasdaq Composite outperformed, gaining 18%. Meanwhile, the S&P 500 and Dow Jones Industrial rose 14.7% and 3.8%, respectively. This strong trend is also expected to continue in the second half of the year.
The S&P 500 hit several record highs and gained at least 500 points in the first six months. The index surpassed the 5,500 level for the first time last week after reaching the 5,400 threshold earlier this month and 5,300 last month. In particular, the “Magnificent Seven” are the S&P 500’s biggest growth engine, accounting for 31% of the index’s weighting, with NVIDIA NVDA leading the AI revolution (read: 5 tech stocks powering the ‘S&P 500 ETF This year).
Large-cap stocks have shown strong resilience in the face of periods of higher-than-expected interest rates because these stocks are less volatile, generate a steady dividend stream, and provide stability. Large-cap companies, especially those with pricing power, can better cope with inflationary pressures by passing costs on to consumers. This makes them attractive to investors looking for inflation protection amid persistent inflation.
At the last FOMC meeting, US policymakers planned only one rate cut for this year. They predict four reductions for 2025. Lower interest rates generally lead to lower borrowing costs, helping businesses easily expand their businesses and leading to increased profitability. This will in turn boost economic growth and boost the stock market.
Leveraged ETF
Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as the use of swaps, futures and other derivative instruments to achieve their objectives. Due to their cumulative effect, investors can enjoy higher returns over a short period of time, provided the trend remains favorable.
Since most of these ETFs seek to achieve their objectives on a daily basis, their performance could differ significantly from the performance of their underlying index or benchmark over a longer period of time than over a shorter period of time (such as weeks, months). months or years) due to their cumulative effect (see: all leveraged stock ETFs here).
Investors should also note that leveraged ETFs carry more risk than traditional funds. They are often more expensive and may be less tax efficient because they can realize capital gains through the use of swaps and other derivative instruments.
T-REX 2X Long NVIDIA Daily Target ETF (NVDX) – Up 440.2%
The T-REX 2X Long NVIDIA Daily Target ETF seeks to amplify (200%) NVIDIA’s daily performance. It has assets under management of $627 million and an expense ratio of 1.05%. The T-REX 2X Long NVIDIA Daily Target ETF trades in an average daily volume of 897,000 shares.
ProShares Ultra Semiconductors (USD) – Up 161.4%
ProShares Ultra Semiconductors provides exposure twice the daily performance of the Dow Jones US Semiconductors Index. It has accumulated $1.4 billion in its asset base and charges 95 bps in fees per year to investors. The US dollar trades in an average daily volume of 369,000 shares (read: Best Performing Stocks from the Best ETF of the First Half).
3X Leveraged ETN BMO REX MicroSectors FANG+ Index (FNGU) – Up 82.5%
The BMO REX MicroSectors FANG+ Index 3X Leveraged ETN seeks to provide three times leveraged exposure to the NYSE FANG Index. The index includes 10 highly liquid stocks that represent today’s industry leaders in technology and Internet/media companies. The BMO REX MicroSectors FANG+ Index 3X Leveraged ETN charges 95 basis points in annual fees and trades an average daily volume of approximately 878,000 shares. It has accumulated $5.6 billion in its asset base.
2x Bitcoin Strategy ETF (BITX) – Up 52.9%
2x Bitcoin Strategy ETF is a leveraged Bitcoin-related ETF that seeks to provide daily investment results that are typically twice the performance of the S&P CME Bitcoin Futures Daily Roll Index. It has assets under management of $1.5 billion and an expense ratio of 1.85%. The 2x Bitcoin Strategy ETF trades in an average daily volume of 4 million shares.
ProShares UltraPro QQQ (TQQQ) – Up 47%
ProShares UltraPro QQQ offers three times the leveraged exposure to the NASDAQ-100 Index. It has amassed $24 billion in assets under management and trades a significant volume of 51 million shares on average. It charges 88 basis points in annual fees.
The story continues
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NVIDIA Corporation (NVDA): Free Stock Analysis Report
ProShares UltraPro QQQ (TQQQ): ETF Research Reports
ProShares Ultra Semiconductors (USD): ETF Research Reports
3X MicroSectors FANG+ Index Leveraged ETN (FNGU): ETF Research Reports
2x Bitcoin Strategy ETF (BITX): ETF Research Reports
T-REX 2X Long NVIDIA Daily Target ETF (NVDX): ETF Research Reports