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7 Leveraged ETFs Rallying on Moderna's Coronavirus Vaccine News

Sweta Jaiswal, FRM
·6 min read

Wall Street once again witnessed a positive day as Moderna (MRNA) came out with encouraging vaccine data. The Dow Jones Industrial Average rose 1.6%, registering intraday and closing record highs on Nov 16. Moreover, the S&P 500 inched up 1.2%, recording an all-time closing high. The tech-heavy Nasdaq Composite also increased 0.8% on the same day.

Notably, the National Institutes of Health-appointed Data Safety Monitoring Board (DSMB) for the Phase 3 study of mRNA-1273 informed Moderna that with a vaccine efficacy of 94.5%, the trial met the pre-mentioned statistical parameter in the study protocol for efficacy. The aforesaid study, known as COVE, is being conducted in association with the National Institute of Allergy and Infectious Diseases (NIAID). It enrolled more than 30,000 participants in the United States.

The worsening coronavirus crisis is raising desperation among investors over the introduction of a vaccine. In fact, the total number of coronavirus cases crossed 54 million globally. Notably, the world’s largest economy saw more than 11 million cases alone. However, the recent coronavirus antibody and vaccine development is buoying hopes of a vaccine soon. Moderna climbed 9.5% after the announcement of encouraging vaccine data on Nov 16.

Leveraged ETFs That Rallied

Here we highlight some leveraged ETFs that gained more than 7% on the positive news regarding Moderna’s vaccine progress:

Direxion Daily Regional Banks Bull 3X Shares DPST — up 13.5% on Nov 16

The banking industry suffered heavy blows from the coronavirus outbreak. However, the ramp-up in the economic activities from vaccine introduction can offset this downside for the banking sector. In fact, bank stocks such as Citigroup (C) and Wells Fargo (WFC) gained more than 3% each and JPMorgan Chase (JPM) advanced 2.8%.

The fund seeks daily investment results, before fees and expenses, of 300% of the performance of the S&P Regional Banks Select Industry Index. It has an expense ratio of 0.99% (read: 6 Best-Performing Leveraged ETF Areas of Last Week).

Direxion Daily Energy Bull 2X Shares ERX — up 13.4%

The coronavirus pandemic dealt a heavy blow to the energy sector. Dented global energy demand and oversupply have also been hurting the sector for long. The outbreak forced operators to cut costs significantly by suspending some of their major activities as well as trimming workforce. Thus, the introduction of vaccine and reopening of economies can help pushing up demand within the sector.

The fund seeks daily investment results, before fees and expenses, of 200% of the performance of the Energy Select Sector Index. It has an expense ratio of 1.06% (read: Top 6 Leveraged ETF Areas of First-Half 2020).

Direxion Daily S&P 500 High Beta Bull 3X Shares HIBL — up 13.4%

The positive news related to the coronavirus vaccine and treatment has been instilling optimism in the market participants for a while. Also, the chances of a divided Congress in the United States seem more likely where Republicans can continue to control the Senate and Democrats, the House. Thus, as a result of this political gridlock, major and stringent changes in the corporate tax policies will be very difficult to implement in the medium term. Thus, easing worries over major policy changes are making the investing environment friendlier for investors.

The fund seeks daily investment results, before fees and expenses, of 300% of the performance of the S&P 500 High Beta Index. It charges fees of 0.98% (read: 6 Best-Performing Leveraged ETF Areas of Last Week).

Direxion Daily Aerospace & Defense Bull 3X Shares DFEN — up 8.8%

The coronavirus outbreak weighed on the U.S. economy with the airline sector being one of the worst-hit spaces. The pandemic chaos resulted in decreased air travel with restrictions imposed by the government. Consequently, the airlines’ top lines suffered a material impact as passenger revenues form the largest component of their total revenue base. In fact, with the pandemic showing almost no signs of waning, air-travel demand is likely to remain stressed, at least in the near term. Looking at the stressed balance sheets of the carriers, it will be safe to say that the sector will surely get a boost from vaccine development.

The fund seeks daily investment results, before fees and expenses, of 300% of the performance of the Dow Jones U.S. Select Aerospace & Defense Index. It charges an expense ratio of 0.99%.

Direxion Daily Retail Bull 3X Shares RETL — up 7.7%

The coronavirus outbreak largely impacted the consumer discretionary sector, which attracts a major portion of consumer spending. Major retailers, restaurants and hotels in the United States had to shut down operations, both domestically and abroad. However, the introduction of a coronavirus vaccine can help generate employment and improvise consumer spending abilities.

The fund seeks daily investment results, before fees and expenses, of 300% of the performance of the S&P Retail Select Industry Index. It has an expense ratio of 0.99% (read: 5 Best Performing Leveraged ETFs of Q3).

Direxion Daily Industrials Bull 3X Shares DUSL — up 7.3%

The industrial sector, which took a hit from the disruption of global supply chains and the closedown of factories, is expected to get an impetus as the coronavirus outbreak is controlled.

The fund seeks daily investment results, before fees and expenses, of 300% of the performance of the Industrial Select Sector Index. It charges fees of 1.01%.

Direxion Daily Small Cap Bull 3X Shares TNA — up 7.1%

The positive news regarding the coronavirus vaccine has been instilling confidence in the market participants for sometime. Small caps have also been performing well, led by increasing hopes of a second round of fiscal stimulus post elections, rising virus cases globally and an uptick in the small-business optimism index. Also, the possibility of a divided Congress in the United States is adding to this upbeat scenario.

The fund seeks daily investment results, before fees and expenses, of 300% of the performance of the Russell 2000 Index. It has an expense ratio of 1.12%.

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Direxion Daily Small Cap Bull 3X Shares (TNA): ETF Research Reports
 
Direxion Daily Regional Banks Bull 3X Shares (DPST): ETF Research Reports
 
Direxion Daily Energy Bull 2X Shares (ERX): ETF Research Reports
 
Direxion Daily Retail Bull 3x Shares (RETL): ETF Research Reports
 
Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN): ETF Research Reports
 
Direxion Daily Industrials Bull 3X Shares (DUSL): ETF Research Reports
 
Direxion Daily S&P 500 High Beta Bull 3X Shares (HIBL): ETF Research Reports
 
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