U.S. Leveraged Equity ETF (SPXL) Hits New 52-Week High


Shutterstock photo

For investors seeking momentum, Direxion Daily S&P 500 Bull 3X Shares SPXL is probably on radar now. The fund just hit a 52-week high and is up nearly 13.2% from its 52-week low price of $31.26/share.

But are more gains in store for this ETF? Let's take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

SPXL in Focus

This fund creates a three times (3x) leveraged long position in the S&P 500 Index while charging 95 bps in fees a year. It has $582.7 million in AUM and trades in heavy volume of around 2.6 million shares on average (see: all the Leveraged Equity ETFs here ).

Why the Move?

The U.S. equity market has been an area to watch lately given that the stocks are on fire and continuously scaling new highs downplaying all political concerns and rounds of weak economic data. This indicates that the eight-year old bull run still has legs. A large number of companies are moving higher with most of them hitting fresh highs lately confirming that the bulls are in control. In such a scenario, leveraged ETFs lead to huge gains in a very short spell.

More Gains Ahead?

The fund might remain strong given a high weighted alpha of 72.86% and a low 20-day volatility of 14.51% . As a result, there is still some promise for investors who want to ride on this surging ETF. However, it is extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing - when combined with leverage - may make this product deviate significantly from the expected long-term performance figures.

Want key ETF info delivered straight to your inbox?

Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DIRX-LC BULL 3X (SPXL): ETF Research Reports

To read this article on Zacks.com click here.

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



This article appears in: Investing , ETFs


More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research
Follow on:








Research Brokers before you trade

Want to trade FX?





Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com