DFEN ETF

DFEN aims to deliver 3x the daily performance of the Dow Jones U.S. Select Aerospace & Defense Index. It provides exposure to the commercial aerospace and national defense markets, each driven by the distinct factors of air travel demand and government defense budgets, respectively. DFEN's performance is highly influenced by volatility due to its daily leverage reset, which can amplify both gains and losses significantly.

These were last week's top performing leveraged and inverse ETFs. Note that because of leverage, these kinds of funds can move quickly.

Wall Street offered a mixed performance last week.

When it comes to defense spending, the United States is head and shoulders above the rest of the globe. A Brookings Institute report emphasized the willingness of the U.S. to shore up its military, especially in a time when geopolitical tensions exist.

The aerospace and defense sector stumbled (like most did) during January. But, it could retain its upward trajectory.

The Direxion Daily Aerospace & Defense Bull 3X Shares ETF has delivered excellent returns but is expected to experience a different trend in the coming months. The ETF's composition is not optimal in the current scenario, with a decline in Boeing significantly impacting its performance. The defense sector may be nearing its peak, and defense companies are more likely to decline than appreciate further.

When the federal government is willing to open its expansive wallet to spend on defense, it could be beneficial to the Direxion Daily Aerospace & Defense Bull 3X Shares ETF (DFEN). 2024 is slated to bring additional spending to this sector amid current geopolitical strife.

Defense spending is increasing due to the threat of a third world war and ongoing conflicts in Ukraine and the Middle East. The leading U.S. defense contractors, such as Honeywell, Raytheon, and Lockheed Martin, are expected to profit from the increase in defense spending. The ITA iShares U.S. Aerospace & Defense ETF and the Direxion Daily Aerospace & Defense Bull 3X Shares Direxion Daily Aerospace ETF are investment options for those looking to capitalize on the growth in defense stocks.

The Israel-Gaza war grabbed all attention last week. This dragged down the bond yields and boosted volatility in the equity market.