ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Leveraged & Inverse ETF Channel
  2. Biotech Went to the Bears in Second Half of 2021
Leveraged & Inverse ETF Channel
Share

Biotech Went to the Bears in Second Half of 2021

Ben HernandezDec 29, 2021
2021-12-29

A bearish sentiment in biotechnology took over in the second half of 2021, providing gains for the Direxion Daily S&P Biotech Bear 3X Shares (LABD B).

LABD climbed almost 21% in the second half of 2021, giving bearish biotech traders something to cheer about. Of course, it helps to have leverage with LABD seeking daily investment results, before fees and expenses, that equal to 300% of the inverse of the daily performance of the S&P Biotechnology Select Industry Index.

The fund, under normal circumstances, invests in swap agreements, futures contracts, short positions, or other financial instruments that, in combination, provide inverse (opposite) or short leveraged exposure to the index equal to at least 80% of the fund’s net assets (plus borrowing for investment purposes). The index is designed to measure the performance of the biotechnology sub-industry based on the Global Industry Classification Standards (GICS).

“The Nasdaq Biotechnology Index has fallen flat in 2021, underperforming returns for the S&P 500 benchmark by more than 25 percentage points — that is the third-widest gap since its inception in the early-1990s, data compiled by Bloomberg show,” a Bloomberg article notes. “The equal-weighted SPDR S&P Biotech ETF (XBI), a fund specialists use to track the industry’s performance, is on pace for its worst year ever down 22%.”

Direxion Daily SP Biotech Bear

The Bullish Biotech Case

Bulls aren’t completely out of the picture when it comes to biotech. According to RBC Capital Markets analyst Brian Abrahams, “the pendulum has swung too far.” Cash-rich biotech companies with upcoming clinical and regulatory catalysts could sway biotech towards bullish momentum.

If that’s the case, then traders can look into the Direxion Daily S&P Biotech Bull 3x Shares (LABU C+). The fund takes the opposite side of LABD, seeking 300% of the daily performance of the S&P Biotechnology Select Industry Index.

“Another potential windfall could come for investors should cash-rich large-cap companies embark in an aggressive buying spree,” the Bloomberg article notes. “Earlier this month, SVB Leerink’s Geoffrey Porges estimated that total potential cash and debt capacity for the biopharma industry may top $1.6 trillion by the end of 2022, with eight companies having potential for over $100 billion in dry powder.”

For more news, information, and strategy, visit the Leveraged & Inverse Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X