5 Best-Performing Leveraged ETFs Of December

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The month of December has been kind for the stock market with the major indices enjoying a historic rally despite the surge in coronavirus cases. The vaccine rollout has been the biggest catalyst as it will end the pandemic and set the stage for a speedy recovery thereby boosting demand for several types of products and services in the economy.

A fresh stimulus package of $900 billion added to the strength. The additional spending will help to cushion the economy amid the second round of restrictions put in place by states and local authorities to manage the COVID-19 spread.

The solid fundamentals have resulted in huge demand for the 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 the five best-performing leveraged equity ETFs that have piled up handsome gains this month. These funds will continue to be investors’ darlings provided the sentiments remain bullish.

Direxion Daily Small Cap Bull 3x Shares (TNA - Free Report) – Up 31.7%

This product provides a triple leveraged play to the small-cap Russell 2000 Index, charging 95 bps in fees and expenses. It has amassed $1.6 billion in its asset base and sees solid volume of 8.7 million shares a day on average.

Direxion Daily S&P Biotech Bull 3x Shares (LABU - Free Report) – Up 31.5%

This fund creates a three times leveraged long position on the S&P Biotechnology Select Industry Index. It charges an annual fee of 0.95% and trades in a heavy average daily volume of about 1.1 million shares. The fund has AUM of $422.6 million.

Direxion Daily Regional Banks Bull 3x Shares (DPST - Free Report) – Up 29.6%

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