The healthcare sector has all the time been seen as a protected funding, however given the way in which the pandemic has affected the trade, there might stay dynamic buying and selling alternatives with the Direxion Each day Healthcare Bull 3X ETF (CURE).
The pandemic itself was already roiling the markets with volatility and 2021 was purported to be the 12 months of restoration. Now that the Delta variant of Covid-19 has taken maintain, the roller-coaster-ride volatility is again as soon as once more.
CURE seeks every day funding outcomes equal to 300% of the every day efficiency of the Well being Care Choose Sector Index. The fund achieves this publicity by investing at the very least 80% of its web property in monetary devices, corresponding to swap agreements, securities of the index, and ETFs that observe the index and different monetary devices that present every day leveraged publicity to the index or to ETFs that observe the index.
The index consists of home firms from the healthcare sector, which incorporates: prescription drugs; healthcare gear and provides; healthcare suppliers and companies; biotechnology; life sciences instruments and companies; and extra. These sub-industries have all been affected by the pandemic in some kind or vogue, giving merchants dynamic alternatives to play the market.
With that triple leverage, the fund has been a stellar performer in 2021, rising to a 56% achieve. After all with leverage comes nice danger; CURE is just meant for use by seasoned buyers.
Tailwinds to Be Had after Q2 Earnings
The place does healthcare go from right here? If second quarter earnings are any indication, there must be extra upside forward.
One in every of CURE’s holdings made out nicely in its second quarter earnings outcomes—United Well being, which contains about 8% of the fund’s holdings. Hospitals world wide had been caught up within the hustle and bustle of the pandemic, resulting in document income for the agency.
“The second quarter for Common Well being Companies was so worthwhile that it returned $189 million in federal coronavirus bailout funds,” an Axios article defined. “However executives cautioned greater COVID circumstances might result in labor shortages.”
As for CURE’s prime holding, Johnson & Johnson, it is had its justifiable share of fluctuations this 12 months after federal well being companies known as for a halt to its vaccine distribution. Since then, nonetheless, the inventory has recovered, sitting at a 9% achieve for the 12 months.
For extra information and data, go to the Leveraged & Inverse Channel.
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