Despite the Push for Clean Energy, This ETF Is GUSHing with Gains

The push toward clean energy has not stopped the oil/gas industry from smashing records in 2021, which is setting up gains for the Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH).

Oil prices are a far cry from what they were in 2020 when the commodity fell below $0. Since then, oil has made an astounding recovery, setting up strength for the energy sector in general.

GUSH seeks daily investment results of 200% of the daily performance of the S&P Oil & Gas Exploration & Production Select Industry Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) 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.

The fund is already up over 70% just over midway through 2021. GUSH includes familiar names in the oil industry, Chevron and Exxon—both of which pulled in “profits for the second straight quarter as improving demand for petroleum products and a jump in oil and gas prices boosted operations,” according to a CNBC article.

GUSH Chart

An Optimistic Outlook for Oil?

According to the article, Chevron also reinstated a share repurchase program, signaling confidence in the oil giant’s future earnings. This optimistic outlook for oil could provide more tailwinds for GUSH.

“Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending,” Chevron Chairman and CEO Mike Wirth said in a statement. “We will resume share repurchases in the third quarter at an expected rate of $2- $3 billion per year.”

Exxon’s top brass is also singing the praises of its profits.

“Positive momentum continued during the second quarter across all of our businesses as the global economic recovery increased demand for our products,” Exxon Chairman and CEO Darren Woods said. “We’re realizing significant benefits from an improved cost structure, solid operating performance and low-cost-of-supply investments that, together, are generating attractive returns and strong cash flow to fund our capital program, pay the dividend and reduce debt.”

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