SQQQ And TECS provide limited exposure to FAANG stocks

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SQQQ And TECS provide limited exposure to FAANG stocks

Coronavirus fears are prompting traders and investors alike to seek refuge in this volatile market. Some of the biggest beneficiaries amid this latest sell-off have been inverse ETFs, funds designed to profit from the decline in the stock market.

The FANG group in particular has been the center of attention lately seeing as how it was one of the biggest contributors to the market-wide rally prior to the pullback; not surprisingly, savvy traders have been looking to exploit weakness in this high-beta group of names as coronavirus fears have escalated. To put this performance divergence into perspective, consider the following chart:

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Q4 2019 hedge fund letters, conferences and more

SALT New York: Canyon, Mudrick, Fortress And Sculptor On Finding Distressed Value

At the 2021 SALT New York conference, which was held earlier this week, one of the panels on the main stage discussed the best macro shifts coming out of the pandemic and investing in value amid distress. The panel featured: Todd Lemkin, the chief investment officer of Canyon Partners; Peter Wallach, the managing director and Read More

SQQQ And TECS

The problem: Traditional benchmark indices like the Nasdaq-100 Index (related Short ETF: SQQQ) and Technology Select Sector Index (related Short ETF: TECS) provide limited exposure to FAANG stocks, notes REX Shares

SQQQ and TECS's Exposure To FAANG Stocks

“Traditional benchmark indices like the Nasdaq-100 Index (related Short ETF: SQQQ) and Technology Select Sector Index (related Short ETF: TECS) provide limited exposure to FAANG stocks. Unlike the traditional benchmark indices, the NYSE FANG+ Index offers an investment solution for direct FAANG exposure. Prior to the launch of FNGD, the opportunity to access inverse daily resetting leverage on FAANG stocks was limited.

Now, with FNGD, investors can access inverse daily resetting leverage on some of the most innovative names in technology and tech-enabled companies,” said Scott Acheychek, President of REX Shares. “Despite a strong tech-led rally to start 2020, we’ve seen a considerable pullback in the equity markets. Investors, seeking a hedge against the recent volatility, have turned to the short -3X FANG ETN (FNGD). The increase in demand for FNGD has led to another upsizing event – marking the sixth time our partners at BMO have increased the number of notes outstanding since launch.”

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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