Stock buybacks and leveraged ETFs present new levels of risk and reward for investors as buybacks may exceed $1 trillion this year. In fact, during the first six months of 2019, Technology 3x (TECL) rose by 87%.
Over the same period, Nasdaq 100 3x (TQQQ) and Semiconductor 3x (SOXL) increased by 67% and 78%, respectively, and all nine of the ETFs in the article below gained over 60%.
Recent trends in interest rates, leveraged ETFs, stock buybacks, artificial intelligence, and risk parity may all help to fuel the next tech bubble. Investors should always be cautious when engaging risk assets and employ prudent risk controls as needed.
See InvestableBenchmarks.com and note that ETF PM has long positions in TECL, TQQQ, and SOXL.
9 Best-Performing Leveraged ETFs of 1H19
Sweta Killa, 7/1/19
Braving all the woes and uncertainties including trade war jitters, global growth concerns, recession fears, government shutdown, geopolitical tension and weak corporate earnings, the Wall Street logged in the strongest performance in more than a decade for the first half of the year. The S&P 500 jumped 17% – its best first-half performance since 1997 – while the Dow climbed 14% – its best show since 1999. Meanwhile, the Nasdaq Composite Index skyrocketed more than 20%, recording its best first six months of the year since 2003.
The rally was powered by hopes of easing money policies as the Fed is ready to cut interest rates as soon as this month if needed. Lower interest rates will keep borrowing cost down, thereby resulting in higher consumer spending and rise in economic activities. Additionally, recovery in U.S. housing market and rising oil price add to the strength
Click here for the full article.