5 Best Performing Leveraged ETFs Of Q3

Despite September’s losses, the third quarter is going strong for the Wall Street. Unprecedented fiscal and monetary stimulus, hopes of a swift economic rebound, positive development in the progress of coronavirus vaccine, rise in mergers and acquisitions, and better-than-expected earnings is driving the quarter. 

Notably, the S&P 500 and the Nasdaq Composite Index are on course for their best two-quarter winning streaks since 2009 and 2000, respectively.
The concerns over lofty valuation and lack of additional fiscal stimulus package from Washington have been weighing on the markets in recent weeks. After fourth straight week of losses, stocks have become attractive for investors looking for a bargain hunt. Additionally, House Speaker Nancy Pelosi over the weekend indicated that a long-stalled last-minute stimulus measure might come before November elections. Renewed hopes for further stimulus coupled with bouts of upbeat economic data lifted investors’ sentiment.  

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 (i.e. 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 some leveraged equity ETFs from different corners of the market that piled up more than 40% gains in the third quarter. These funds will continue to be investors’ darlings provided the sentiments remain bullish.

BMO REX MicroSectors FANG+ Index 3X Leveraged ETN (FNGU - Free Report) – Up 84%

This note seeks to offer three times leveraged exposure to the NYSE FANG Index, charging 95 basis points (bps) in annual fees. The ETN has accumulated $729.1 million in its asset base and trades in average daily volume of 571,000 shares.

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Axwell Ax 6 months ago Member's comment

What about $DPST?