Top-Performing Inverse/Leveraged ETF Areas of Last Week

Wall Street was downbeat last week, with the S&P 500, the Dow Jones and the Nasdaq losing about 0.7%, 1.3% and 0.1%, respectively. Last week marked the fourth straight week of losses for the S&P 500. The S&P 500 dropped 4.9% in September, its worst monthly performance since December, according to FactSet data, as quoted on MarketWatch.

Let’s find out which inverse/leveraged ETF areas topped last week.

Inverse/Leveraged Gold Miners

MicroSectors Gold Miners -3X Inverse Leveraged ETNs GDXD – Up 21.3%

Direxion Daily Gold Miners Index Bear 2x Shares DUST – Up 15.3%

MicroSectors Gold -3X Inverse Leveraged ETNs DULL – Up 13.1%

 The greenback has been in solid shape. Invesco DB US Dollar Index Bullish Fund UUP was up 0.4% last week. Since gold is inversely related to the U.S. dollar, gold prices slumped last week. Moreover, inflation is also falling. Since gold acts as an inflation-hedge, a falling inflation scenario went against gold prices. SPDR Gold Shares GLD was off 3.5% last week. This has weighed on gold mining ETFs even more as mining stocks act as leveraged plays of the underlying metal.

Inverse/Leveraged Utilities

ProShares UltraShort Utilities SDP – Up 15.5%

The benchmark U.S. treasury yield was 4.59% on Sep 29, having started the month at 4.18%. The yield hit a monthly high of 4.61% on Sep 27. Such steep rise in bond yields weighed on sectors that are rate-sensitive. Utilities is such a sector. As the sector is debt-centric and offers handsome yields, the sector ETFs underperform in a rising rate environment.

Leveraged Auto

MAX Auto Industry 3X Leveraged ETN CARU – Up 10.1%

Though the autoworkers’ strike expanded against GM and Ford last week, the rally in Rivian shares helped the fund to win last week. Rivian — which takes 11.96% of the underlying index of CARU —jumped more than 19% last week. Morgan Stanley remains bullish on Rivian Automotive (RIVN), as quoted on investorplace.com. Other electric-vehicle heavyweights in the index — Tesla (up 2.8%), Lucid Group (up 8.5%), Nikola Corp (up 30.7%) — also surged last week.

Inverse/Leveraged Treasury ETFs

Direxion Daily 20+ Year Treasury Bear 3x Shares TMV – Up 9.5%

ProShares UltraPro Short 20+ Year Treasury TTT – Up 9.4%

As U.S. treasury yields slumped on rising rate concerns, treasury prices fell as bond yields and prices are inversely related. No wonder, inverse-leveraged treasury ETFs fell last week (read: September Turns Out as Worst Month of 2023: ETF Winners).

Leveraged Coinbase

GraniteShares 1.5x Long Coinbase Daily ETF CONL – Up 8.6%

Coinbase Global’s share prices rose 7.4% last week. Coinbase explored FTX Europe acquisition as it intends to broaden its overseas derivatives business. In the latest trend of continued interest in digital currencies, a significant Ethereum transaction was observed. Several Ethereum-based ETFs are likely to hit the market. Coinbase's reputation as a reliable custodian of digital assets has been boosted by its stringent safety and compliance measures. No wonder, these factors boosted the leveraged Coinbase ETF.

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