Inflation has obviously been an enduring theme for 2022, which has produced some heavy volatility. But of course, volatility only means there are market opportunities for traders to take advantage of, including three leveraged exchange traded funds (ETFs) from Direxion that have been seeing year-to-date gains of over 100%.
As mentioned, inflation has been a common refrain heading into the end of 2022 and may even continue making headlines in 2023. That said, traders can use the continued expectation of more inflation to tailor their trading opportunities heading into the new year.
Fixed income investors have certainly seen better days in 2022. With the U.S. Federal Reserve tightening monetary policy, rising interest rates have put a dent into bond income even with rising yields.
As yields rise higher, bond prices head the opposite direction, so opportunities for inverse bond trading have been a positive for ETFs like the Direxion Daily 20+ Yr Treasury Bear 3X ETF (TMV). TMV seeks daily investment results equal to 300% of the inverse of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index.
TMV invests in swap agreements, futures contracts, short positions, or other financial instruments that provide inverse or short leveraged exposure to the index, which is a market value-weighted index that includes publicly issued U.S. Treasury debt securities that have a remaining maturity of greater than 20 years. In terms of year-to-date gains, TMV has topped the list of Direxion’s leveraged products, but there are other funds producing these outsized returns.
Energy Sector Shining
Rising oil and gas prices have been a boon for energy traders, but not so much for consumers who are feeling the pain at the pump. Nonetheless, traders in energy have been rewarded nicely with ETFs like the Direxion Daily Energy Bull 3X Shares (ERX). ERX seeks daily investment results equal to 200% of the daily performance of the Energy Select Sector Index, which is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector, which includes the following industries: oil, gas, consumable fuels, and energy equipment and services.
Building off the energy theme is a spike in oil and gas services. As such, the Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH) has been producing triple-digit YTD gains.
GUSH seeks daily investment results of 200% of the daily performance of the S&P Oil & Gas Exploration & Production Select Industry Index. The fund invests in financial instruments and securities of the index, ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index.
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