December is usually a fine month for stocks, but traders looking to bolster their sector-level returns have some compelling ideas to consider from the world of leveraged exchange traded funds (ETFs). Of course, leveraged ETFs should be used as short-term trades, not held for the long-term so the ideas that follow here are intended to be held for all of December and into the new year.
When it comes to leveraged sector ETFs that merit consideration in December, one of the sectors that stands out is healthcare. On a historical basis, the healthcare sector is the second-best performer in December. Additionally, it is the best-performing sector in January so the following leveraged ETFs can be used though not held by aggressive traders over the next two months.
A good place to start is with the Direxion Daily Healthcare Bull 3X Shares (NYSE: CURE), one of the most venerable names among leveraged healthcare ETFs. CURE attempts to deliver triple the daily returns of the Health Care Select Sector Index, which includes harmaceuticals; health care equipment and supplies; health care providers and services; biotechnology; life sciences tools and services; and health care technology companies.
A New Addition
CURE's underlying index allocates over a third of its weight to pharmaceuticals stocks, but if that is not enough for some traders, a new ETF from Direxion should work.
The Direxion Daily Pharmaceutical & Medical Bull 3X Shares (NYSE:PILL) was reborn last month. PILL was reborn in mid-November and attempts to deliver triple the daily returns of the Dynamic Pharmaceutical Intellidex Index.
PILL's lineup is two-thirds pharmaceuticals stocks and a third biotechnology names. Speaking of biotechnology...
Focusing On Biotechnology
In addition to CURE, one of the most popular leveraged healthcare ETFs is the Direxion Daily S&P Biotech Bull 3X Shares (NYSE: LABU). LABU tries to deliver triple the daily returns of the equal-weight S&P Biotechnology Select Industry Index.
Perhaps some traders are anticipating a cheery holiday season for biotechnology stocks because LABU has averaged daily inflows of over $5.5 million over the past month, according to Direxion data. However, LABU entered Tuesday as Direxion's worst-performing leveraged bull fund in the month of November.
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