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Leveraged Financial ETF (FAS) Hits a New 52-Week High

Sanghamitra Saha
Updated

For investors looking for momentum, Direxion Daily Financial Bull 3X ETF FAS is probably on radar now. The fund just hit a 52 week high, and shares of FAS are up roughly 133.6% from their 52 week low price of $22.11/share.

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

FAS in Focus

The fund offers 300% of the performance of the Russell 1000 Financial Services Index. It charges 95 bps in fees (see all leveraged Equity ETFs here).

Why the Move?

U.S. banking giants have passed the Dodd-Frank Act supervisory stress test 2017 successfully. The Fed subsequently okayed plans from the 34 largest U.S. banks to deploy additional capital in stock buybacks, dividends and other purposes for the first time since the financial crisis.

If this was not enough, the Fed is on a policy tightening mode having enacted two rate hikes this year already. Fed chief Yellen also recently made it clear that the Fed’s gradual policy tightening and reduction of its $4.5 trillion balance sheet will remain on course. Since financial stocks benefit from a rising rate environment, the sector surged lately.

More Gains Ahead?

The fund has a positive weighted alpha of 84.99. A positive weighted alpha hints at more gains. As a result, there is definitely some promise for investors who want to ride on this surging ETF.

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DIR-FIN BULL 3X (FAS): ETF Research Reports
 
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