Highly-Leveraged Nasdaq ETF Jumps 11% in Beaten-Down Stock Rally

(Bloomberg) -- Amid crazy high market volatility, Tuesday’s stock rally lifted some of the hardest-hit exchange-traded funds.

Stocks rebounded from the worst sell-off since 2008 on bets the Trump administration will unveil stimulus measures to combat the impacts of the coronavirus. While the strong equity gains don’t mean price swings will abate any time soon, traders piled into some beaten-down ETFs even before the equity recovery.

Here are some of the highlights:

Stocks

• The $3.9 billion ProShares UltraPro QQQ, which seeks results that correspond to three times the daily performance of the Nasdaq 100, was up 11% Tuesday -- following a 31% sell-off in three days. The fund, known as TQQQ, lured about $159 million in the latest session for which Bloomberg has data. And that’s even as the market sold off.
• The $243 billion SPDR S&P 500 ETF Trust climbed 3.7% after the worst rout since December 2008. SPY attracted $1.7 billion worth of inflows Monday, according to data compiled by Bloomberg. That may be a sign that some investors lined up to buy the dip.

Bonds

• The $24 billion iShares 20+ Year Treasury Bond ETF, ticker TLT, halted a three-day advance amid a slide in bond yields.
• Meantime, two giant junk-bond ETFs -- the iShares iBoxx High Yield Corporate Bond and the SPDR Bloomberg Barclays High Yield Bond ETF rallied.

Oil

• After a 71% plunge on Monday, the VelocityShares 3x Long Crude Oil ETN, or UWT, soared 21% as oil rebounded from its worst loss since 1999. The $203 million fund narrowly missed triggering a termination event.
• State Street’s Energy Select Sector SPDR Fund gained as much as 8.5% after dropping 20% Monday. The $7.2 billion fund, ticker XLE, is the the largest ETF tracking the oil and gas industry.

Financials

• The $15.4 billion Financial Select Sector SPDR Fund, or XLF, rebounded from an 11% plunge. The ETF saw its biggest outflows since August on Monday.
• The $1.1 billion SPDR S&P Regional Banking ETF, or KRE, climbed 7.2% after its biggest three-day slide on record.

--With assistance from Tom Lagerman.

To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Katherine Greifeld in New York at kgreifeld@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita Nazareth, Randall Jensen

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