These Are Some Of The Best-Performing Leveraged ETFs Of The Year

Barring a few hiccups heading into March, the first quarter of 2019 has been among the best three months in recent history. After a January that saw the broad market gain nearly 8 percent, February pushed the S&P up another 3.25 percent. All told, the index is up about 12 percent year-to-date.

With markets still rebounding from late-2018’s sell-off and first-quarter earnings quickly approaching, we thought it would be a good time to take a look at which thematic ETFs among Direxion’s leveraged catalog have so far shown the strongest results on the year. Additionally, we’ll take a brief look at the fundamental strength of the components of each to determine which ETFs hold the highest growth prospects heading into the second quarter.

Industrials

Source: Yahoo Finance; data as of March 25. Past performance is not indicative of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.  Current performance may be lower or higher than the performance data quoted. For standardized performance, click here.

Up 45 percent YTD, the Direxion Daily Industrials Bull 3X Shares DUSL has suffered as of late due to the recent tragic crashes and subsequent grounding of the Boeing Co. BA 737 MAX 8 fleet. Although developments from that investigation will surely remain a point of risk for the ETF, other major components like Honeywell International Inc. HON and Union Pacific Corporation UNP, both of which are up around 18 percent YTD, will likely buoy the industry.

Earnings from these components could also stand to further boost the sector, with all three companies registering a stellar track record of positive surprises against analyst expectations.

AI & Automation

Source: Yahoo Finance; data as of March 25 Past performance is not indicative of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.  Current performance may be lower or higher than the performance data quoted. For standardized performance, click here.

Approaching its first full year in existence, the Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares UBOT has gained 57 percent since the start of 2019. The ETF’s diverse set of holdings includes representatives from across manufacturing, healthcare and technology fields. Chief among the leading components of the ETF are Intuitive Surgical, Inc. ISRG, up about 20 percent on the year, and Keyence Corporation KYCCF, up about 26 percent YTD.

However, with many of the fund’s largest exposures centered around Japan’s recently contracting manufacturing industry, investors in the space should pay close additional attention to economic and trade signals in Asia, a challenging proposition in the midst of a Sino-U.S. trade war.

China

Source: Yahoo Finance; data as of March 25. Past performance is not indicative of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.  Current performance may be lower or higher than the performance data quoted. For standardized performance, click here.

Speaking of China, the Direxion Daily CSI 300 China A Share Bull 2X Shares finds itself higher by 61 percent since the start of the year. The fund’s primary exposure to the county’s nationalized financial system prompted a jump in the ETF late in February due to a huge spike in lending within the country over the course of January. The record lending has been attributed to a government stimulus program initiated at the start of the year that injected 560 billion yuan ($83 billion) into the nation’s banking system.

However, the rate of loans dropped significantly over the course of February, leading to uncertainty surrounding the sustainability of the country’s approach to leveraging debt to spur growth.

Biotech

Source: Yahoo Finance; data as of March 25. Past performance is not indicative of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.  Current performance may be lower or higher than the performance data quoted. For standardized performance, click here.

Finally, in other M&A news, the Direxion Daily S&P Biotech Bull 3X Shares LABU is up 67 percent due in large part to a continued string of large-scale deals in the cash-flush pharmaceutical industry. February saw a rash of announced deals, from Roche Holdings AG Basel ADR RHHBY $4.8 billion bid for gene therapy company Spark Therapeutics Inc. ONCE to Merck & Co., Inc. MRK offer for immunotherapy company Immune Design Corp IMDZ. Add to that strong earnings from the likes of Acadia Pharmaceuticals ACAD and Ultragenyx Pharmaceutical Inc. RARE have also pushed the sector to the top of many investors’ portfolios.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866.476.7523 or visit our website at direxioninvestments.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Shares of the Direxion Shares are bought and sold at market price (not NAV) and are not individually redeemed from a Fund. Market Price returns are based upon the midpoint of the bid/ask spread at 4:00 pm EST (when NAV is normally calculated) and do not represent the returns you would receive if you traded shares at other times. Brokerage commissions will reduce returns. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV. Some performance results reflect expense reimbursements or recoupments and fee waivers in effect during certain periods shown. Absent these reimbursements or recoupments and fee waivers, results would have been less favorable.

Investing in a Direxion Shares ETF may be more volatile than investing in broadly diversified funds. The use of leverage by an ETF increases the risk to the ETF. The Direxion Shares ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment. The Direxion Shares ETFs are not designed to track their respective underlying indices over a period of time longer than one day.

Distributor: Foreside Fund Services, LLC.