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Top Leveraged ETFs of Q3

Sanghamitra Saha

Third quarter of 2019 can easily be marked bypeaks and valleys in the Sino-U.S. trade tensions, Japan-South Korea issues pertaining to trade, Brexit uncertainty, Hong Kong unrest, a plunge in Argentina’s currency, talks of Trump impeachment, attack on Saudi’s oilfieldsand a barrage of global policy easing.

SPDR S&P 500 ETF (SPYand SPDR Dow Jones Industrial Average ETF (DIA) added about 0.4% and 0.8% in the third quarter, respectively. Invesco QQQ Trust QQQ was down 0.2% in Q3. All-world ETF iShares MSCI ACWI ETF ACWI retreated about 0.7% in the quarter. The third quarter was great for the bond market with iShares 20+ Year Treasury Bond ETF TLT adding 8.2% in the quarter.

Market Vectors Double Long Euro ETN (URR) – Up 140.6%

The leveraged note on euro tracks the performance of the Double Long Euro Index, which 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. The note charges 65 bps in fees (read: Top and Flop Leveraged ETFs of Last Week).

UBS ETRACS Monthly Reset 2xLeveraged ISE Exclusively Homebuilders ETN (HOML) – Up 39.3%

The leveraged homebuilding ETF tracks the ISE Exclusively Homebuilders Total Return Index, which focuses solely on companies that engage in the development and construction of homes and communities. It is designed to provide direct exposure to homebuilders. The note charges 85 bps in fees (read: 4 Leveraged ETF Areas That Are Up 100% This Year).

Investors should note that low mortgage rates on dovish Fed policies, slow home price growth and the release of some upbeat economic data are working in favor of the space. Rising for the second consecutive month, sales of existing homes (which account for about 90% of total home sales) in the United States increased in August to a 17-month high. Not only existing ones, new home sales increased more than expected in August. Housing starts and building permits rose to a more than 12-year high in August (read: Here's Why Homebuilding ETFs Are Soaring).

VelocityShares 3x Long Silver ETN Linked to the S&P GSCI Silver Index ER (USLV) – Up 38%

The fund seeks daily investment results, before fees and expenses, which correspond to two times the daily performance of the Bloomberg Silver Subindex, which reflects the performance of silver as measured by the price of COMEX silver futures contracts.

The year 2019 has seen impressive performance from silver so far. Geo-political tensions and turbulence in the stock market drove demand for silver as a store of wealth as such moves boost safe-haven trade (read: What's Behind the Rally in Silver ETFs?).

Direxion Daily Utilities Bull 3X Shares (UTSL) – Up 26.8%

The Fed has cut rates for the second time in September 2019. In a lower-rate environment, high-dividend-yield sectors such as utilities generally are the biggest beneficiaries given its sensitivity to interest rates. As a result, leveraged utilities ETF UTSL posted an outstanding performance in the third quarter.

Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF) – Up 22.6%

A low-rate environment arising out a dovish Fed and the ECB resulted in a rally in the treasury yields.  The fund seeks daily investment results, before fees and expenses, of 300% of the performance of the ICE U.S. Treasury 20+ Year Bond Index. The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than 20 years (read: Leveraged/Inverse ETFs That Gained Double-Digits Last Week).

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SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
 
iShares 20+ Year Treasury Bond ETF (TLT): ETF Research Reports
 
Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF): ETF Research Reports
 
iShares MSCI ACWI ETF (ACWI): ETF Research Reports
 
Invesco QQQ (QQQ): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Market Vectors-Double Long Euro ETN (URR): ETF Research Reports
 
Direxion Daily Utilities Bull 3X Shares (UTSL): ETF Research Reports
 
UBS ETRACS Mnthly Reset 2xLevrgd ISE Exclusivly Hombuildrs ETN (HOML): ETF Research Reports
 
VelocityShares 3x Long Silver ETN (USLV): ETF Research Reports
 
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