5 Best Leveraged ETFs Of February

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The stock markets across the globe saw wild swings last month due to fears of higher inflation that prompted a sell-off in government bonds and spread anxiety across financial markets.

However, renewed optimism over speedy economic recovery from the pandemic-driven recession kept the bullish run intact. This is especially true given hopes of further U.S. stimulus package, signs of a healing labor market, continued progress in more vaccines, rapid vaccination rollout, and better-than-expected earnings.

The combination of factors will result in increased industrial and manufacturing activity as well as a pickup in consumer demand. In particular, U.S. consumer spending rose the most in seven months in January, indicating that the economy is growing faster than expected.

This has resulted in huge demand for leveraged ETFs as investors seek to register big gains in a short span. Leveraged funds provide multiple exposure (2X or 3X) to the daily performance of the underlying index by employing various investment strategies such as swaps, futures contracts, and other derivative instruments. Due to their compounding effect, investors can enjoy higher returns in a very short period of time, provided the trend remains positive.

Below we highlight five best-performing leveraged equity ETFs from different corners of the market that piled up more than 30% gains last month. These funds will continue to be investors’ darlings, provided the sentiments remain bullish.

MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU - Free Report) – Up 94.6%

This ETN provides three times leveraged exposure to the Solactive MicroSectors U.S. Big Oil Index, which is equal-dollar weighted and provides exposure to the 10 largest U.S. energy and oil companies. It has been able to manage $481.6 million in its asset base while trading in an average daily volume of 382,000 shares. Expense ratio comes in at 0.95%.

Direxion Daily Regional Banks Bull 3x Shares (DPST - Free Report) – Up 62%

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