NAIL ETF

The Direxion Daily Homebuilders & Supplies Bull 3X Shares ETF seeks to deliver 300% (3x) of the return of an index tracking US stocks exposed to the homebuilding sector. NAIL has outperformed the SPY in 2024 and over the past five years but has also seen significant near-term draw-downs. The forward P/E multiple of the index's top ten holdings has increased since July 2024 but remains attractive relative to the SPY.

Direxion Daily Homebuilders & Supplies Bull 3X Shares ETF has substantially underperformed the SPY ETF in 2024. The ETF is heavily concentrated, with the top 10 positions accounting for 66.2% of net assets. These 10 holdings offer a forward P/E of 14.36 and a Seeking Alpha quant rating of 3.54.

Direxion Daily Homebuilders & Supplies Bull 3X Shares ETF experienced significant gains in 2023 as rates moved lower and sentiment for new home construction improved. Home buying slowed in 2023 as interest rates soared, but prices remained high due to low existing home supplies. The Dow Jones U.S. Select Home Construction Index reached a record high in 2023, supported by low existing home inventories and pent-up demand.

NAIL is ranked as the top ETF in the class of equity leveraged funds by Seeking Alpha Quant. The recent decline in mortgage rates has improved earnings expectations for homebuilding stocks. The current economic and market conditions are favorable for investing in homebuilding stocks.

The Dow Jones U.S. Select Home Construction Index experienced significant volatility due to the global pandemic and government stimulus programs. Rising interest rates have made it more difficult for home buyers, leading to a decline in existing home supplies and an increase in new home construction. Despite rising rates, the stock market and housing market have continued to climb, indicating that the market is digesting higher interest rates.

As interest rates and inflation climbed, the homebuilders sector was getting squeezed from both sides. Supply costs were increasing while high-interest mortgages began scaring buyers away from the market.