Scalper1 News
Thanks to heightened volatility in the stock markets, leveraged or inverse ETFs have been gaining immense popularity as investors are making a dash for big gains on quick market turns. This is especially true as the stocks logged their best gains last week on a year-to-date basis after seeing the worst-ever start to a year. However, the markets fell again in yesterday’s trading session, keeping the volatility levels high. Leveraged or inverse products either create a leveraged long/short position, an inverse long/short position or a leveraged inverse long/short position in the underlying index through the use of swaps, options, future contracts and other financial instruments. Due to their compounding effect, investors can enjoy higher returns in a very short period of time, provided the trend remains a friend. However, these funds run the risk of huge losses compared to traditional funds in fluctuating or erratic markets. Further, their performance could vary significantly from the actual performance of their underlying index over a longer period when compared to a shorter period (such as weeks or months). In spite of this drawback, investors flocked to these products for outsized gains in a short span. We have highlighted 16 leveraged/inverse ETFs that have seen massive trading so far this year. Most of these ETFs have delivered negative returns from a year-to-date look, yet have been investors’ darlings with abnormal returns piled up in a short period when the trend favored a specific corner of the world. ProShares Ultra VIX Short-Term Futures ETF (NYSEARCA: UVXY ) Leveraged Factor: 2x Inverse: No Benchmark Index: S&P 500 VIX Short-Term Futures Index YTD Volume: $48.38 billion This product provides two times (2x) exposure to the daily performance of the S&P 500 VIX Short-Term Futures Index, which reflects an implied volatility of the S&P 500 Index at various points along the volatility forward curve. It offers a daily rolling long position in the first- and second-month VIX futures contracts. The ETF has amassed about $378.4 million in its asset base while charging 95 bps in fees per year from investors. It is the most heavily traded ETF so far this year, with the highest trading volume of $48.38 billion. The fund has gained 3 1.3% in the year-to-date time frame. VelocityShares Daily Inverse VIX Short-Term ETN (NASDAQ: XIV ) Leveraged Factor: 1x Inverse: Yes Benchmark Index: S&P 500 VIX Short-Term Futures Index YTD Volume: $25.76 billion With an AUM of more than $ 1 billion, this ETN is popular and offers inverse (opposite) exposure to the S&P 500 VIX Short-Term Futures Index, charging a higher expense ratio of 1.35%. The note has seen total trading volume of $25.76 billion so far this year and has lost 23.7%. Direxion Daily Small Cap Bull 3x Shares ETF (NYSEARCA: TNA ) Leveraged Factor: 3x Inverse: No Benchmark Index: Russell 2000 Index YTD Volume: $14.54 billion This product provides triple (3x) leveraged play to the small-cap Russell 2000 Index, charging 95 bps in fees and expenses. It has been able to manage $787.7 million in its asset base with year-to-date trading volume of $ 14.54 billion. TNA is down 28.9% so far this year. ProShares UltraShort S&P 500 ETF (NYSEARCA: SDS ) Leveraged Factor: 2x Inverse: Yes Benchmark Index: S&P 500 index YTD Volume: $14.33 billion This fund seeks two times leveraged inverse exposure to the S&P 500 index, charging 89 bps in fees. It is relatively popular, having amassed $ 1.5 billion in AUM and having exchanged a total of $ 14.33 billion in volume so far. SDS is up 7.6% in the year-to-date time frame. VelocityShares Daily 2x VIX Short-Term ETN (NASDAQ: TVIX ) Leveraged Factor: 2x Inverse: No Benchmark Index: S&P 500 VIX Short-Term Futures Index YTD Volume: $13.86 billion Like UVXY, this note also offers two times exposure to the S&P 500 VIX Short-Term Futures Index, but comes with an additional expense ratio of 0.70%. With an AUM of $342.8 million, the fund has traded in massive volumes of $ 13.86 billion and has surged 30.7% this year. VelocityShares 3x Inverse Crude Oil ETN (NYSEARCA: DWTI ) Leveraged Factor: 3x Inverse: Yes Benchmark Index: S&P GSCI Crude Oil Index Excess Return YTD Volume: $13.59 billion This product provides three times inverse exposure to the daily performance of the S&P GSCI Crude Oil Index Excess Return. With an AUM of $490.2 million, it has traded in massive volumes of $ 13.59 billion and has gained 18.4% this year. The ETN is a bit pricey as it charges 1.35% in annual fees. ProShares Ultra S&P 500 ETF (NYSEARCA: SSO ) Leveraged Factor: 2x Inverse: No Benchmark Index: S&P 500 Index YTD Volume: $13.30 billion This is the most popular and liquid ETF in the leveraged space with an AUM of $ 1.6 billion. The fund seeks to deliver twice the return of the S&P 500 Index, charging investors 0.89% in expense ratio. It has seen solid trading volumes of $ 13.30 billion so far this year and is down 9.6%. ProShares Short VIX Short-Term Futures ETF (NYSEARCA: SVXY ) Leveraged Factor: 1x Inverse: Yes Benchmark Index: S&P 500 VIX Short-Term Futures Index YTD Volume: $12.64 billion Like TVIX, this fund offers inverse exposure to the S&P 500 VIX Short-Term Futures Index, but with no leveraged factor. It charges 95 bps in annual fees per year from investors and has exchanged about $ 12.64 billion in shares this year. The fund has accumulated $487 million in its asset base and shed 23.7% so far this year. Direxion Daily Gold Miners Index Bull 3x Shares ETF (NYSEARCA: NUGT ) Leveraged Factor: 3x Inverse: No Benchmark Index: NYSE Arca GoldMiners Index YTD Volume: $11.04 billion This product seeks to deliver thrice the daily performance of the NYSE Arca Gold Miners Index, which consists of firms that operate globally in both developed and emerging markets, and are involved primarily in the exploration and production of gold. It is rich in AUM of $946 million and has seen solid trading volume of $ 1 1.04 billion so far in the year. Expense ratio comes in at 0.95%. The fund has delivered robust returns of 1 12. 1% year to date. ProShares UltraPro Short S&P 500 ETF (NYSEARCA: SPXU ) Leveraged Factor: 3x Inverse: Yes Benchmark Index: S&P 500 Index YTD Volume: $10.88 billion This fund provides three times inverse exposure to the S&P 500 Index. It has an expense ratio of 0.93% and has seen a massive trading volume of $ 10.88 billion so far this year. It has amassed $548.6 million in its asset base and gained 10.4% year to date. ProShares UltraPro Short QQQ ETF (NASDAQ: SQQQ ) Leveraged Factor: 3x Inverse: Yes Benchmark Index: NASDAQ 100 Index YTD Volume: $9.91 billion Investors embracing this product made huge profits from the declining NASDAQ 100 Index in a very short period. The product has exchanged $9.9 1 billion in average daily volume this year. It offers three times inverse exposure to the NASDAQ 100 Index, charging 0.95% in annual fees. The fund has an AUM of $378.2 million and has added 19.9% in the year-to-date time frame. ProShares UltraPro S&P 500 ETF (NYSEARCA: UPRO ) Leveraged Factor: 3x Inverse: No Benchmark Index: S&P 500 Index YTD Volume: $9.55 billion This product also tracks the S&P 500 index, but offers thrice the returns of the daily performance with a bit higher expense ratio (by 2 bps) than SPXU. It has an AUM of $856.9 million and year-to-date trading volume of $9.55 billion. UPRO is down over 14.9% so far this year. Direxion Daily Small Cap Bear 3x Shares ETF (NYSEARCA: TZA ) Leveraged Factor: 3x Inverse: Yes Benchmark Index: Russell 2000 Index YTD Volume: $9.41 billion This product provides triple leveraged inverse play to the small-cap Russell 2000 Index, charging 95 bps in fees and expenses. It has been able to manage $444.2 million in its asset base with year-to-date trading volume of $9.4 1 billion. TZA is down 3 1.6% so far this year. VelocityShares 3x Long Crude Oil ETN (NYSEARCA: UWTI ) Leveraged Factor: 3x Inverse: No Benchmark Index: S&P GSCI Crude Oil Index Excess Return YTD Volume: $8.69 billion This is the popular leveraged fund targeting the energy segment of the commodity market through WTI crude oil futures contracts. It seeks to deliver thrice the returns of the S&P GSCI Crude Oil Index Excess Return and has amassed $9 10 million in its asset base. Though the fund charges a higher fee of 1.35% per year, its total trading volume of $8.69 billion year to date is incredible. UWTI is down about 6 1.8% in the same time frame. ProShares Short S&P 500 ETF (NYSEARCA: SH ) Leveraged Factor: 1x Inverse: Yes Benchmark Index: S&P 500 Index YTD Volume: $8.20 billion This is the most popular inverse ETF with an AUM of $2.6 billion, providing inverse exposure to the daily performance of the S&P 500 index. It has seen a massive trading volume of $8.20 billion so far this year and has returned about 5.4%. Expense ratio came in at 0.90%. Direxion Daily S&P 500 Bull 3x Shares ETF (NYSEARCA: SPXL ) Leveraged Factor: 3x Inverse: No Benchmark Index: S&P 500 Index YTD Volume: $8.12 billion SPXL makes an excellent pick for investors seeking to make large profits from the soaring stock market in a very short span. The fund creates a triple leveraged long position in the S&P 500 Index while charging 95 bps in fees a year. It has $635.2 million in AUM and has traded in a solid total volume of $8. 12 billion so far this year. The ETF has lost about 18% year to date. Original post Scalper1 News
Scalper1 News