After a tumultuous market decline in May, bullish investors returned to the stock market in June driven by intimations by the Federal Reserve and central banks across the world that are once again moving to ease monetary policies. Some are signaling interest rate cut while some are planning fresh fiscal stimulus packages to overcome global growth stagnation.
In particular, the Federal Reserve in its latest meeting indicated its readiness to cut interest rates if deemed necessary while European Central Bank (ECB) also kept interest rates on hold at record-low levels until at least the second half of 2020. Meanwhile, the Bank of Japan also pledged to maintain the current low rates “at least until the spring of 2020.
The confluence of these events has been beneficial for leveraged ETFs, which seek to multiply the returns of normal market conditions. Here are the 5 best leveraged ETFs for June:
1. The Direxion Daily Technology Bull 3X Shares (TECL) seeks daily investment results, before fees and expenses, of 300% of the performance of the Technology Select Sector Index. There is no guarantee the funds will meet their stated investment objectives.
This leveraged ETF seeks a return that is 300% of the return of its benchmark index for a single day. The fund should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day. It has an expense ratio of 1.08% and is currently up 22.6% in June.
2. The Direxion Daily Gold Miners Index Bull 3X Shares (NUGT) seeks daily investment results, before fees and expenses, of 300% of the performance of the NYSE Arca Gold Miners Index. There is no guarantee the fund will meet its stated investment objectives.
This leveraged ETF seeks a return that is 300% of the return of its benchmark index for a single day. The fund should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day. NUGT has an expense ratio of 1.23% and is currently up 85.37% as of June 27, 2019.
3. The Direxion Daily Russia Bull 3X (RUSL) Shares seeks daily investment results, before fees and expenses, of 300% performance of the MVIS Russia Index which invests in Russian stocks. There is no guarantee that these funds will achieve their stated investment objectives.
This leveraged ETF seeks a return that is 300% the return of their benchmark index for a single day. The fund should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day. RUSL has an expense ratio of 1.36% and is currently up 27.4% as of June 27, 2019.
4. The ProShares Ultra Basic Materials ETF (UYM) seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the Dow Jones U.S. Basic Materials Index.
This leveraged ProShares ETF seeks a return that is 2x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares’ returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. UYM has an expense ratio of 0.95% and is currently up 23% as of June 27, 2019.
5. The Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares (UBOT) seeks daily investment results, before fees and expenses, of 300% of the performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index. There is no guarantee the fund will meet its stated investment objective.
This leveraged ETF seeks a return that is 300% the return of its benchmark index for a single day. The fund should not be expected to provide three times the return of the benchmark’s cumulative return for periods greater than a day. UBOT has a lofty expense ratio of 2.88% and is currently up 24.8% as of June 27, 2019.
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