Markets are off to a strong start this Monday as the United States kicks off its biggest immunization effort since we fought polio back in the 1950s. Vaccine news will remain in the headlines as we await Thursday’s FDA ruling for Emergency Authorization Use of Moderna’s (MRNA) mRNA-1273. The Fed meets on Wednesday as it updates its latest projections for GDP, Inflation, and Unemployment while deciding on its monthly asset purchase program. FedEx (FDX) will also provide a key read into the transportation system when it posts earnings Thursday after the close. Finally, we would be remissed if we did not remind you of the fiscal stimulus back drop that continues to cast a shadow on market activity. This week will help set the tone for markets into the final few weeks of 2020. Let us take a look at what Financial Advisors are researching ahead of these events.
- Trivia Question- The first ETF was the SPDR S&P 500 ETF (SPY) launched on January 22,1993. Do you know when the first leveraged ETF was introduced to the market? (Answer below)
There are two moves on this week’s list that caught our attention, both centered around 3x leveraged ETFs. The first is the Direxion Daily S&P 3x leveraged bull ETF (SPXL) which moved to #3 from #17 in the Top ETFs By ALL FAs. The second move was by Direxion’s Oil & Gas (Exploration & Production) 2x bull ETF (GUSH) which came in at #5 after showing up at #18 in last week’s rankings. We would also mention that MicroSectors 3x Big Oil Index (NRGU) made this week’s list at #13 after coming in at #19 last week.
TrackStarIQ Data
| RANK | TOP ETFS – BY ALL FAs (Total Traffic) Last Week | Ticker | TOP ETFS BY FAs w/ AUM>$1B (Total Traffic) Last Week | Ticker | ETF CATEGORIES SPOTLIGHT SMALL CAP GROWTH (Total Traffic) Last Week | ETF CATEGORIES SPOTLIGHT- LEVERAGED EQUITIES (Total Traffic) Last Week |
|---|---|---|---|---|---|---|
| 1 | SPDR S&P 500 ETF | SPY | VanEck Vectors Gold Miners ETF | GDX | IWM | GUSH |
| 2 | Invesco QQQ | QQQ | SPDR S&P 500 ETF | SPY | IJH | SPXL |
| 3 | Direxion Daily S&P 500 Bull 3X Shares | SPXL | Invesco QQQ | QQQ | CNCR | SQQQ |
| 4 | ARK Innovation ETF | ARKK | iShares Russell 2000 ETF | IWM | RZG | NRGU |
| 5 | Direxion Daily S&P Oil & Gas Exploration & Production Bull 2x Shares | GUSH | iShares Core S&P Mid-Cap ETF | IJH | PEJ | TQQQ |
| 6 | VanEck Vectors Gold Miners ETF | GDX | Financial Select Sector SPDR Fund | XLF | VBK | TNA |
| 7 | iShares Russell 2000 ETF | IWM | Global X Lithium ETF | LIT | PBW | DFEN |
| 8 | Energy Select Sector SPDR Fund | XLE | ARK Genomic Revolution ETF | ARKG | IWO | SOXL |
| 9 | SPDR Gold Trust | GLD | Invesco DB US Dollar Index Bullish Fund | UUP | IJR | QID |
| 10 | ProShares Ultra VIX Short-Term Futures | UVXY | iShares MSCI Emerging Markets ETF | EEM | VXF | TZA |
| 11 | Technology Select Sector SPDR Fund | XLK | ARK Innovation ETF | ARKK | SLY | LABU |
| 12 | iPath Series B S&P 500 VIX Short-Term Futures ETN | VXX | MicroSectors U.S. Big Oil Index 3X Leveraged ETN | NRGU | IWC | BIB |
| 13 | MicroSectors U.S. Big Oil Index 3X Leveraged ETN | NRGU | iShares Core S&P 500 ETF | IVV | MDYG | UPRO |
| 14 | United States Oil Fund | USO | SPDR Gold Trust | GLD | OUSM | FAZ |
| 15 | VanEck Vectors Semiconductor ETF | SMH | iPath Dow Jones-UBS Commodity ETN | DJP | BBC | DRIP |
| 16 | iShares Silver Trust | SLV | ARK Web x.0 ETF | ARKW | IJK | SPXS |
| 17 | ProShares UltraPro Short QQQ | SQQQ | iShares Russell 2000 Growth ETF | IWO | VBK | JNUG |
| 18 | ARK Genomic Revolution ETF | ARKG | SPDR S&P Regional Banking ETF | KRE | MDY | SDOW |
| 19 | Financial Select Sector SPDR Fund | XLF | JPMorgan BetaBuilders Developed Asia ex-Japan ETF | BBAX | SSO | |
| 20 | SPDR Dow Jones Industrial Average ETF | DIA | Vanguard FTSE Emerging Markets ETF | VWO | NUGT |
It is not a surprise to see two energy ETFs on the list. The increase in searches in energy by FAs has been highlighted in these newsletters as that research has corresponded with a rally in the space. What is of interest is the focus on leverage, particularly in the S&P Index via the SPXL. It begs the question as to why market participants are looking at leveraging. Is it in anticipation of a stimulus package? Perhaps these are FAs that have lagged in performance and need to maximize returns in any end of year rally. The research activity has also been reflected in the bullish sentiment in the markets. Whatever the reason for the increase, we would take note that peers are taking a closer look at these 3x leveraged ETFs as we head toward the end of 2020.
Advisors ETF Category Spotlight
We have introduced a new segment to this newsletter in which we plan to highlight two ETF categories and the components that are included.
- Small Cap Growth- The IWM and IJH ETFs have been two of the strongest performers the past couple of weeks, boosted by anticipation of stimulus and vaccines. On Friday, we focused on the increased interest around cancer immunotherapy names and we wanted to highlight Loncar Cancer Immunotherapy ETF (CNCR) which was the third most searched in this category. This is a lower liquidity ETF but it is showing some signs of breaking out above the $34 level.
- Leveraged Equities- We highlighted GUSH, SPXL and NRGU in our newsletter. These were naturally at the top of the list for this category. Other leveraged ETFs that also garnered attention were the Direxion Small Cap Bull ETF (TNA) and the 3x bull Aerospace and Defense ETF (DFEN) which we mentioned in this newsletter a few weeks ago.
Trivia Answer- ProShares introduced a line of six Leveraged and Inverse ETFs on June 19, 2006.