Wall Street Caps Best Month In Decades: 6 Top Leveraged ETFs

Amid volatility and uncertainty related to U.S.-China trade, global growth slowdown threats and the longest government shutdown, Wall Street made a sharp turnaround in January, posting the best month in many decades. This is especially true as the S&P 500 logged in the best January since 1987, while Dow Jones saw the best start to a year since 1989, climbing 7.9% and 7.2%, respectively. Meanwhile, Nasdaq had its best January since 2001, surging 9.7%.

The historic gain came on the back of signs of progress in U.S.-China trade negotiations, a dovish Fed and strong labor market. Additionally, a string of better-than-expected earnings and the outcome of the Fed’s latest meeting added to the strength. The central bank indicated a pause in the rate hike cycle, after four lift-offs last year. Further, oil price also rebounded strongly after a wild fourth quarter on falling production and OPEC-led fresh crude output cuts. 

All these fundamentals have 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 a friend.

Below, we have highlighted six ETFs that have piled up exceptional returns in the first month of 2019. These funds will continue to be investors’ darlings provided the sentiments remain the same.

Direxion Daily Brazil Bull 3x Shares (BRZU - Free Report) – Up 62.8%

The ETF creates a three times long position in the MSCI Brazil 25/50 Index. It has amassed about $402.6 million in its asset base while charging 95 bps in fees per year from investors. Volume is solid as it exchanges around 2.8 million shares a day on average.

Direxion Daily Natural Gas Related Bull 3x Shares (GASL - Free Report) – Up 51.5%

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