Are you looking to invest in some popular plays in the market right now? A major exchange-traded fund provider is going deep on two popular areas: megacap tech and weight loss drug stocks. Roundhill Investments is preparing to launch a fund focusing on companies behind GLP-1 drugs, expected to debut in May.
In addition to this upcoming fund, Roundhill recently launched leveraged and inverse exchange-traded funds that track widely held tech stocks such as Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Roundhill Daily 2X Long Magnificent Seven ETF (MAGX) aims to profit from gains in these companies, while the Roundhill Daily Inverse Magnificent Seven ETF (MAGQ) allows investors to bet negatively on the group.
According to Dave Mazza, Roundhill’s chief strategy officer, these funds are designed for traders with short-term views on the market. They reset their performances daily and are considered risky choices for investors.
However, Todd Rosenbluth, head of research at VettaFi, advises caution when investing in leveraged and inverse ETFs due to their volatility. He compares them to playing baseball, where you might hit a home run but also strike out frequently. Since their debut in February, MAGX is up almost 7%, while MAGQ is down nearly 4%.
It’s important to approach these investments with a clear understanding of the risks involved and a willingness to monitor your positions regularly. Keep in mind that leveraged and inverse ETFs may not be suitable for every investor, so be sure to do your research before diving in.
Would you consider adding these funds to your investment portfolio? Let us know your thoughts in the comments below!
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