- The ETF aims to achieve daily investment returns of 200 percent of the S&P Oil & Gas Exploration & Production Select Industry Index.
- GUSH is more interested in smaller exploration and production companies than in the big oil and gas companies.
What is the GUSH ETF’s structure?
In the last three months, US stocks have posted solid increases. Except for utilities, the S&P 500 sectors are all in the black for the time being. The S&P 500 Energy Sector has outperformed the rest of the market, gaining more than 45 percent in the first nine months of 2020. The good performance of oil producers, who are now facing a stronger outlook due to the higher shift in the commodity’s price, has fueled this positive surge. In the previous three months, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which is considered the benchmark fund for the upstream oil and gas business, has increased by about 70%. The Direxion Daily S&P Oil & Gas E&P Bull 2x Shares ETF has increased by 160 percent in the same time period. GUSH has demonstrated why oil and gas investors should keep this fund on their radar.
About GUSH
Derivatives (such option contracts) are commonly used by leveraged ETFs to increase their exposure to a benchmark, index, or commodity by two, three, or even four times. In contrast to non-leveraged ETFs, which maintain a 1:1 ratio to replicate index performance, most leveraged ETFs track the equities in their underlying index on at least a two-to-one basis. Investors looking for buy-and-hold investments should avoid leveraged ETFs since they offer short-term chances. Leveraged ETFs are more volatile, risky, and expensive than many other funds, making them unsuitable for conservative investors or those looking for buy-and-hold equities.
GUSH is a leveraged ETF that allows investors to double their money on a long position in the exploration and production industry. GUSH uses borrowed capital to maintain a $2 exposure for every $1 in the index, as its name suggests. GUSH aspires to outperform the S&P Oil & Gas Exploration & Production Select Industry Index by 2x on a daily basis. Investors cannot invest directly in the index, but the XOP ETF, which tracks the same index, is a non-leveraged ETF. As a result, XOP can be used as a substitute for the S&P Oil & Gas E&P Select Industry Index.
Because they pay premiums on derivatives and incur borrowing costs, most leveraged ETFs have a greater fee than their non-leveraged counterparts, and GUSH is no different. GUSH has a 1.04 percent expense ratio, which is higher than XOP’s 0.35 percent but comparable to other leveraged ETFs. GUSH is in charge of $266 million in assets.
GUSH is a type of ETF.
Standard & Poor’s Index Provider provides the S&P Oil & Gas Exploration & Production Select Industry Index (SPSIOPTR), which covers domestic firms in the oil and gas exploration and production sub-industry. The Index is intended to assess the performance of a sub-industry or set of sub-industries based on Global Industry Classification Standards (GICS). An index cannot be purchased directly.
Will GUSH ever increase in price?
Our AI fund expert predicts a positive trend in the future, and the GUSH shares could be a fantastic place to invest for profit. Since the March catastrophe, Gush has been steadily increasing.
What caused GUSH to be so high?
GUSH has risen over 100% in the last few months as a result of its leverage boost.
The ETF aims to achieve daily investment outcomes of 200 percent of the S&P Oil & Gas Exploration & Production Select Industry Index on a daily basis. Under normal conditions, the fund invests at least 80% of its net assets (including borrowing for investment purposes) in index financial instruments and securities, index ETFs, and other financial instruments that provide daily leveraged exposure to the index or index ETFs.
The ‘golden cross’ for GUSH occurred in late December, when the fund’s 50-day moving average crossed above its 200-day moving average. Since then, GUSH has risen by more than 80%, and it could continue to rise as long as the fundamental backdrop for increased oil prices exists.
Momentum is currently favoring GUSH, according to technical indicators. At 72.03, the relative strength index (RSI) is solidly overbought.
What caused the gush stock to plummet?
During the first 11 months of 2020, the Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares ETF (GUSH) plummeted by nearly 97 percent. This poor performance can be attributed to a supply surplus produced by a price war between Saudi Arabia and Russia, as well as a sharp decline in demand induced by the worldwide crisis. Demand for further oil and gas exploration was effectively stifled as a result.
Unfortunately for GUSH investors, the S&P Oil & Gas Exploration & Production Select Industry Index has a 2x leveraged daily exposure. To reduce concentration in a small number of significant-sized enterprises, GUSH weights its index evenly, but this did not help much in 2020.
As of November 2020, GUSH had a gross expense ratio of 1.05 percent, up from 1.05 percent when it first began in May 2015.
Was there a reverse stock split at Gush?
A 1-for-40 reverse stock split has been announced by & Prod. Bull 3X Shares (GUSH). Each GUSH ETF will be converted into the right to receive 0.025 (New) Direxion Daily S&P Oil & Gas Exp. as a result of the reverse stock split.
Is GUSH a good long-term bet?
Because it leverages derivative instruments to increase the returns of the underlying index, GUSH should only be utilized as a short-term trading product. The ETF must buy when underlying asset prices rise and sell when they fall every day. Long-term investors are thus harmed by the compounding effects of everyday returns.