The S&P 500 hit a record close last week, courtesy of a Santa Clause rally. Wall Street was charged-up with the S&P 500 (up 1.22%), the Dow Jones (up 0.15%), the Nasdaq Composite (up 3.12%) and the Russell 2000 (up 4.1%) gaining handsomely on optimism that the Omicron variant of COVID won’t mess up with global economic recovery.      

S&P Biotech Bull 3X Direxion (LABU), Direxion Travel & Vacation Bull 2X ETF (OOTO), Semiconductor Bull 3X Direxion (SOXL), Ultrapro Russell 2000 ETF (URTY), and Microsectors Fang & Innovation 3X ETN (BULZ) were the winners last week in the space of leveraged ETF investing.

Investors gained optimism from some of President Joe Biden’s encouraging announcements. Biden mentioned that booster shots are providing strong protection against COVID-19. He also mentioned that the United States will not slip into the intense pandemic conditions faced during March 2020.

Updating his preparations for the healthcare infrastructure and arrangements, Biden mentioned that the White House is buying 500 million at-home COVID-19 tests that will be available free of cost from 2022. Biden added that 1000 medical personnel will be allocated from the military to assist hospitals if the situation gets severe in January and February.

The Food and Drug Administration also granted approval to Pfizer Inc's (PFE) oral antiviral COVID-19 pill for at-risk people aged 12 and above. This makes it the first at-home treatment for coronavirus and a potentially important tool in the fight against the fast-spreading Omicron variant.

As a result, the reopening plays in sectors like airlines, cruise lines and entertainment recorded a bounce. Against this backdrop, below we highlight the ETF winners in detail. 

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ETFs in Focus

S&P Biotech Bull 3X Direxion (LABU) – Up 21.8%

As long as the virus threat is around, extra focus on healthcare and biotech stocks is warranted and thus the segment gained. Demand for vaccines, boosters and therapies will remain high in the coming days. No wonder, LABU surged last week thanks to the Omicron threat.

Direxion Travel & Vacation Bull 2X ETF (OOTO) – Up 20.6%

The BlueStar Travel and Vacation Index comprises US listed stocks, including depository receipts, of companies that are Travel and Vacation companies. Direxion Travel & Vacation Bull 2X ETF is a clear beneficiary of the rebound in reopening trades.

Semiconductor Bull 3X Direxion (SOXL) – Up 13.8%

Semiconductor stocks are in the pink now on earnings strength. Plus, the demand scenario in the chip industry is excessively strong. The ICE Semiconductor Index of ETF SOXL measures the performance of the semiconductor sub-sector of the U.S. equity market. The expense ratio of SOXL is 0.99%.

Ultrapro Russell 2000 ETF (URTY) – Up 12.5%

The ProShares UltraPro Russell2000 seeks daily investment results, before fees and expenses, that correspond to triple (300%) the daily performance of the Russell 2000 Index. Small-caps – yet another reopening trade – jumped last week on news of Pfizer’s treatment and Biden’s at-home COVID-19 tests.

Microsectors Fang & Innovation 3X ETN (BULZ) – Up 12.5%

The MicroSectors FANG & Innovation 3x Leveraged ETN are linked to a three-times leveraged participation in the performance of the Solactive FANG Innovation Index, compounded daily, minus the applicable fees. The tech segment staged a rebound last week and benefited Microsectors Fang & Innovation 3X ETN. The ETN charges 95 bps in fees.