The last full trading week of March capped off a contentious month as the coronavirus pandemic upended the markets with a fear-fueled equities sell-off. There were some winners that week and one of those victorious was a leveraged aerospace and defense exchange-traded fund, which saw a 66% gain.
That fund was none other than the Direxion Daily Aerospace & Defense 3X Shares ETF (NYSEArca: DFEN). DFEN seeks daily investment results equal to 300% of the daily performance of the Dow Jones U.S. Select Aerospace & Defense Index, which attempts to measure the performance of the aerospace and defense industry of the U.S. equity market.
The federal coronavirus stimulus package was a major benefactor for many sectors, including aerospace and defense. In particular, it was a boon for the airline industry, which saw its revenues in a world of hurt with travel restrictions in place.
“Surging 66% in the week in question, the Direxion Daily Aerospace & Defense Bull 3X Shares ETF (DFEN) staged possibly the biggest rebound of any of the other leveraged funds offered by the provider,” a Direxion Investments “X-Change” article noted. “It’s fair to pin the cause of this surge squarely on the shoulders of the coronavirus relief package passed by Congress, which included a $60B bailout of the fledgling airline industry. This helped push shares of major component Boeing Co. higher by 70% and bolstered other contractors like Lockheed Martin Corporation and United Technologies Corporation.”
“At the moment, traders