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Top and Flop Leveraged ETFs of Last Week

Sanghamitra Saha

After heightened tensions related to the U.S.-China trade war escalation last month, China announced that its trade officials will have talks with U.S. counterparts in Washington early next month.

Investors should note that both parties hiked tariffs on Sep 1 in the latest round. China’s government enacted higher tariffs on Sep 1 on the proportion of goods that only make up “about one third of the more than 5,000 product lines listed in the latest announcement.” Most of the duties will be implemented on Dec 15.

This move by China came on the heels of the U.S. government’s announcement on Aug 1 that it is imposing a 10% tariff on $300 billion worth of Chinese goods. Washington then delayed some of the tariffs on Aug 13 stating that those will be enacted in two tranches, on Sep 1 and Dec 15.

But following China’s announcement of retaliation, Trump said that he would “raise tariffs on $250 billion worth of Chinese exports to 30% from 25% in October.” Moreover, tariffs planned on another $300 billion of Chinese goods have been revised to 15% from 10% (read: August ETF Events That Grab Headlines).

In such a situation, optimism surrounding trade talks boosted markets at the end of last week. SPDR S&P 500 ETF SPY and SPDR Dow Jones Industrial Average ETF DIA added around 2.6% each and Invesco QQQ Trust QQQ gained about 2.7% more last week.

Let’s take a look at the winning and the losing leveraged ETFs.

Winners

VelocityShares 3x Long Natural Gas ETN Linked to the S&P GSCI Natural Gas Index ER (UGAZ) – Up 28.9%

The VelocityShares 3x Long Natural Gas ETN is designed to reflect a leveraged long exposure to the performance of the S&P GSCI Natural Gas Index ER.

Natural gas was reportedly driven by massive short-covering or a “short-squeeze” last week due to the volatile movement of Hurricane Dorian, per the source. Also, the ongoing season is beneficial for natural gas prices as the commodity prices normally remain elevated around Labor Day, if we go by that source.

Direxion Daily Semiconductor Bull 3X Shares (SOXL) – Up 12.6%

The fund gives exposure to 300% of the performance of the PHLX Semiconductor Sector Index. Hopes of trade talks boosted semiconductor stocks as this area is one of the most trade-sensitive ones (read: 8 Top-Performing Leveraged ETFs of Last Week).

Direxion Daily South Korea Bull 3X Shares (KORU) – Up 11.5%

This is another beneficiary of trade talk optimism. Increased risk-on sentiments propelled South Korean stocks last week and this triple-leveraged South Korea ETF.

Losers

Market Vectors Double Long Euro ETN (URR) – Down 22.8%

The underlying Double Long Euro Index is intended to be an investable alternative to a two-times leveraged, long investment in the value of the euro relative to the U.S. dollar and tracks the value of the spot exchange rate with financing adjustments.

Slowdown in the Euro zone, signs of a looming German recession, Brexit woes and the last but not the least, chances of the announcement of more policy easing in the upcoming ECB meeting kept a lid on euro prices.

VelocityShares Daily 2x VIX Short-Term ETN (TVIX) – Down 16.1%

The underlying VelocityShares Daily 2x VIX Short-Term ETN is linked to 2x the daily performance of the S&P 500 VIX Short-Term Futures Index less the investor fee. As the broader market recoiled at the end of the last week, equity market volatility slumped.

Direxion Daily Junior Gold Miners Index Bull 3X Shares (JNUG) – Down 14.4%

The broader market rally hurt gold prices. SPDR Gold Shares GLD was off 2% last week. Subdued gold prices hurt the leveraged gold mining ETF.

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SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
 
Direxion Daily Junior Gold Miners Index Bull 3X Shares (JNUG): ETF Research Reports
 
Direxion Daily Semiconductor Bull 3X Shares (SOXL): ETF Research Reports
 
SPDR Gold Shares (GLD): ETF Research Reports
 
VelocityShares Daily 2x VIX Short Term ETN (TVIX): ETF Research Reports
 
Invesco QQQ (QQQ): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
VEL-3X LNG NG (UGAZ): ETF Research Reports
 
MKT-VEC DB L EU (URR): ETF Research Reports
 
Direxion Daily MSCI South Korea Bull 3x Shares (KORU): ETF Research Reports
 
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