Investing Swiss Army knife, a phrase that describes exchange-traded funds (ETFs). Investors can do almost anything with them, from building a core of their portfolio to tactical defense and even profit when the markets drop.
In 2022 the volatility in the market can make it difficult to track all of the individual stocks. Actively managing a portfolio would include entering and exiting positions at opportune times, however over 79% of active managers underperform the S&P 500. Depending on complicated tactics it seems to guarantee a loss.
On the other hand, ETFs are managed by professionals and well-diversified. As a result, Finbold has overviewed four ETF’s that delivered 30% returns in the last month.
MicroSector U.S. Big Oil (NYSEARCA: NRGU)
This exchange-traded note offers investors three times the daily performance of the Solactive MicroSectors U.S. Big Oil Index. The index is composed of only 10 companies and the month-to-date (MTD) return is 31.52%.
MicroSector Oil & Gas (NYSEARCA: OILU)
Bank of Montreal’s exchange-traded note offers a similar investing paradigm as NRGU. The composition of the index is a bit broader than its older cousin NRGU with a set maturation date of June 28th, 2041. MTD performance is 34.77%.
ProShares Ultra Bloomberg Natural Gas (NYSERARCA: BOIL)
Bloomberg’s ETF seeks investment results that correspond to 200% of the performance of the Bloomberg Natural Gas Sub-Index. This leveraged ETF produced an MTD performance of a whopping 63.12%.
Direxion Daily S&P Oil and Gas (NYSEARCA: GUSH)
The ETF seeks daily investments which result in equivalent to 200% of the performance of the S&P Oil & Gas Exploration & Production Select Industry Index. Focus is mostly on smaller exploration and production players, with an MTD performance of 39.22%.
With Russian aggression on Ukraine, oil and gas prices in Europe and the world have spiked close to all-time high levels. Gas was further bolstered by seasonal volatility helping certain leveraged gas ETFs reach amazing monthly and yearly returns.
These leveraged ETF’s seem to be an attractive buy for a near-term capital gain. Keeping an eye on the energy crissis globally can help inform potential investors when will good entry and exit positions appear so they can act accordingly.
In addition to the four ETFs described above, it may be worthwhile to examine the top five Energy ETFs that generated above 20% returns in 2022 in order to have a more comprehensive understanding of the market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.