As investors gear up for a volatile market in the year ahead, more aggressive exchange traded fund investors have utilized leveraged and inverse products to quickly adapt and capitalize on shifting market conditions.
On the upcoming webcast, Tactical Strategies to Combat Market Volatility, Sylvia Jablonski, Managing Director and Co-Head of the Capital Markets & Institutional Strategy Team at Direxion, and Michael Venuto, Co-founder & CIO of Toroso Investments, will help go over tools that ETF investors can use to hedge against sharp turns in a volatile environment or to capture short-term trends.
For instance, three popular contrarian bets that have cropped up this year include theDirexion Daily Gold Miners Bear 3X Shares (NYSEArca: DUST), Direxion Daily Energy Bull 3X Shares (NYSEArca: ERX) and Direxion Daily S&P Biotech Bull Shares (NYSEArca: LABU). [Popular Short-Term Leveraged/Inverse ETF Bets]
DUST shares outstanding have substantially increased during the rally in gold, which suggests that some are calling the surge in bullion and miners overdone. DUST has attracted $446.7 million in net inflows so far this year.
However, the Direxion Daily Junior Gold Miners Index Bull 3x Shares (NYSEArca:JNUG) and the Direxion Daily Gold Miners Bull 3X Shares (NYSEArca: NUGT), which take the 3x or 300% daily performance of a group of junior gold miners and larger gold miners, respectively, continue to outperform as ongoing uncertainty helps prop up gold prices. Over the past week, JNUG rose 25.9% and NUGT increased 22.5%.
ERX shares outstanding have substantially increased during the crude oil sell-off as traders tried to catch a falling knife and timed a market bottom. ERX added $50.1 million in net inflows year-to-date.
The more focused S&P Oil & Gas Exploration & Production Bull Shares (NYSEArca:GUSH) has also been outperforming, rising 16.8% over the past week. Oil and gas explorers and producers have been among the worst performers in the recent energy rout, and they also experienced the strongest rebound on the recent rally in oil prices.
LABU shares outstanding have also substantially increased over the course of the correction in the biotechnology sector. Biotechs have yet to rebound along with the broader market. LABU saw $151.3 million in inflows so far this year.
