A changing pharmaceutical industry is setting up a few trades in the leveraged fund space, specifically for ETFs from Direxion Investments.
One of the catalysts for change, especially within the past year is the incorporation of more e-commerce channels for distribution.
“One of the biggest shifts taking place in pharmaceutical distribution right now is that more and more consumers are buying over-the-counter (OTC) products that are non-controlled online,” a Modern Materials Handling article said. “This started pre-Covid, but the pandemic revved up that engine and now the onus is on the pharma distributors to meet this new demand.”
“The pharmaceutical industry is embracing the e-commerce channel for non-controlled drugs,” says Adam Brown, global market development director at Dematic, “which means that about 80% of the drugs used in day-to-day life can be ordered online now.”
3 Funds to Trade
The obvious fund to consider is the Direxion Daily Pharmaceutical & Medical Bull 3X Shares ETF (PILL). PILL seeks daily investment results of 300% of the daily performance of the S&P Pharmaceuticals Select Industry Index, which is a modified equal-weighted index that is designed to measure the performance of the stocks comprising the S&P Total Market Index that are classified in the GICS pharmaceuticals sub-industry.
A more broad-based play, specifically in the larger umbrella of the healthcare sector is the Direxion Daily Healthcare Bull 3X ETF (CURE). Like PILL, CURE also uses triple leverage and seeks daily investment results equal to 300% of the daily performance of the Health Care Select Sector Index.
The fund achieves this exposure by investing at least 80% of its net assets in financial instruments, such as swap agreements, securities of the index, and ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or to ETFs that track the index.
Lastly, another broad-based move would be to play the growing reliance on the internet with the Direxion Daily Dow Jones Internet Bull 3X Shares (WEBL). WEBL seeks daily investment results, before fees and expenses, of 300% of the daily performance of the Dow Jones Internet Composite Index.
The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments that track the index and other financial instruments that provide daily leveraged exposure to the index or to ETFs that track the index.
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