Best Leveraged ETF Areas of Past Decade

In the past decade, we saw “the king of all bull markets.” The run was the longest ever. An easy money policy has been the main driver of this bull market. Though Wall Street’s record bull run ended on Mar 12, 2020 on COVID-induced selloffs, markets again shrugged off all worries and are hovering around all-time high levels.

Fed’s massive stimulus, record-bottom rates, fat fiscal stimulus in times of crisis, a divided Congress, a faster-than-expected rollout of coronavirus vaccines and chances of an antiviral treatment have been propelling the space.

SPDR S&P 500 ETF SPY gained about 256.3% during the past 10 years, SPDR Dow Jones Industrial Average ETF DIA advanced 194.9% and the tech-heavy Invesco QQQ Trust QQQ added 460% (as of Oct 19, 2021).

Against this backdrop, we would like to note a few decade-best leveraged ETF areas.

Semiconductor

Rising consumer spending on technology, a 5G boom, expectations of higher smartphone sales, rising demand for electric vehicles, the announcement of the phase-one U.S.-China trade deal and coronavirus-induced social distancing propelled the tech and semiconductor space.

Direxion Daily Semiconductor Bull 3X Shares SOXL – Up 7721.2%

ProShares Ultra Semiconductors (USD) – Up 2239.8%

Technology

The decade-long cheap money inflows and global economic improvement (before the virus outbreak) made growth stocks and the tech-heavy ETF winners last decade. The sector overall has been thriving on exponential growth in enterprise cloud computing, cyber security, remote communications, video gaming and e-commerce to online payments.

ProShares UltraPro QQQ TQQQ – Up 8516.2%

Direxion Daily Technology Bull 3X Shares (TECL) – Up 6190.6%

Healthcare

Mergers and acquisitions, positive drug data and FDA approvals were the key catalysts for the space. A total of 378 novel drugs and 27 biosimilars were approved by the U.S. Food and Drug Administration (FDA) between 2010 and 2019. Oncology remains the top therapy area (25%), followed by infection (15%) and central nervous system disorders (11%).

Direxion Daily Healthcare Bull 3x Shares CURE – Up 2427.9%

Financials

Rock-bottom rates boosted activities in both areas — household and corporates — thus favoring banking transactions. An upbeat stock market benefited the trading business of banks. The performance of the investment banking business has also been strong due to hefty IPO activities, and mergers and acquisitions. No wonder, financial stocks were the winners in the past decade.

Direxion Daily Financial Bull 3x Shares FAS – Up 2115.3%

Retail

A dovish Fed, low rates, cheaper oil since 2014, a decently growing U.S. economy, solid job growth (in the pre-COVID era), a soaring stock market, the resultant wealth effect, and upbeat consumer confidence helped the consumer stocks, especially the retail ones.

Direxion Daily Retail Bull 3x Shares RETL – Up 1886.6%

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.