5 Best Inverse/Leveraged ETFs of Last Week
Wall Street delivered downbeat performances last week with the S&P 500 losing 2.3%, the Dow Jones retreating 1.1%, the Nasdaq Composite falling 2.9% and the Russell 2000 dropping 1.2% (read: Time for Value ETFs as Buffett Indicator Signals Caution?).
Notably, Rating agency Fitch downgraded the United States’ credit rating to AA+ from AAA last week, expecting fiscal deterioration over the next three years and repeated last minute debt ceiling negotiations that can pressurize the government’s ability to pay its bills.
Fitch initially raised concerns about a potential downgrade in May and continued to support that stance in June after the resolution of the debt ceiling crisis. The agency, however, stated its intention to conclude the review in the third quarter of the current year, per Reuters, quoted on Yahoo Finance (read: ETF Areas in Focus on Fitch Downgrade of Credit Rating).
The move weighed both on the stock and bond markets. The benchmark U.S. treasury yields hit the highest levels since November. The benchmark U.S. treasury yield started the week at 3.97%, hit a high of 4.20% on Aug 3, closed the week at 4.05% (read: Inverse Treasury ETFs to Play as 10-Yr Yield at Highest Since November).
If this was not enough, ADP reported much stronger private sector job gains in July than economists expected. Private sector jobs increased by 324,000 in July, following a revised 455,000 increase in June. The data breezed past economists’ expectations (surveyed by FactSet) of 185,000 job creations, as quoted on Barrons.
While this piece of information triggered the chances of further Fed rate hikes, U.S. non-farm payrolls numbers came in at light on Aug 4 and quelled the Fed rate hike bet a bit. The U.S. economy created 187,000 jobs in July of 2023, below market expectations of 200,000 and following a downwardly revised 185,000 in June.
Among the key earnings releases, Amazon AMZN shares soared after reporting a blockbuster result while Apple AAPL shares slumped as slowing hardware sales. Overall, the broader market was edgy and the volatility-gauging index CBOE Volatility Index (VIX) gained 24.1% last week. Oil prices remained steady with WTI crude ETF United States Oil ETF USO adding 1.4% last week.
Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
ETFs in Focus
2x Long VIX Futures ETF UVIX – Up 27.2% Last Week
The underlying Long VIX Futures Index expresses the daily performance of a theoretical portfolio of first and second month VIX futures contracts that are rolled daily. The expense ratio of the fund is 1.77%.
ConvexityShares Daily 1.5x SPIKES Futures ETF SPKY – Up 20.1%
The underlying T3 SPIKE Front 2 Futures Index measures the returns of a portfolio of monthly SPIKES Futures contracts with a weighted average of one month to expiration. The expense ratio of the fund is 0.79%.
Direxion Daily S&P 500 High Beta Bear 3X Shares HIBS – Up 13.9%
The underlying S&P 500 High Beta Index selects 100 securities to include in the Index from the S&P 500 Index that have the highest sensitivity to beta over the past 12 months. The expense ratio of the fund is 1.07%.
MicroSectors Travel -3x Inverse Leveraged ETN FLYD – Up 13.2%
The underlying MerQube MicroSectors U.S. Travel Index is a total return index that tracks the stock prices of U.S. domiciled and listed securities that are materially engaged in specified segments of the travel industry. The expense ratio of the fund is 0.95%.
Direxion Daily Technology Bear 3X Shares TECS – Up 12.2%
The underlying Technology Select Sector Index includes domestic companies from the following industries: computers & peripherals; software; diversified telecommunications services; communications equipment; semiconductors & semiconductor equipment; internet software & services; IT services; electronic equipment, instruments & components; wireless telecommunication services; & office electronics. The expense ratio of the fund is 1.08%.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
United States Oil ETF (USO): ETF Research Reports
Direxion Daily Technology Bear 3X Shares (TECS): ETF Research Reports
Direxion Daily S&P 500 High Beta Bear 3X Shares (HIBS): ETF Research Reports
2x Long VIX Futures ETF (UVIX): ETF Research Reports
MicroSectors Travel -3X Inverse Leveraged ETNs (FLYD): ETF Research Reports
ConvexityShares Daily 1.5x SPIKES Futures ETF (SPKY): ETF Research Reports
