USD: Its Time Has Come And Gone

seekingalpha03-16

takasuu The AI and semiconductor boom has been lucrative for investors in the right stocks and funds. Those brave enough to leverage the gains in funds such as the ProShares Ultra Semiconductors ETF (...

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Those brave enough to leverage the gains in funds such as the ProShares Ultra Semiconductors ETF (...</p>\n\n<a href=\"https://seekingalpha.com/article/4678649-usd-time-has-come-gone\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>USD: Its Time Has Come And Gone</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nUSD: Its Time Has Come And Gone\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-03-16 17:14 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4678649-usd-time-has-come-gone><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>takasuu The AI and semiconductor boom has been lucrative for investors in the right stocks and funds. Those brave enough to leverage the gains in funds such as the ProShares Ultra Semiconductors ETF (...</p>\n\n<a href=\"https://seekingalpha.com/article/4678649-usd-time-has-come-gone\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0320765059.SGD","symbol_name":"FTIF - Franklin US Opportunities A Acc SGD","start_time":0,"source_url":"https://seekingalpha.com/article/4678649-usd-time-has-come-gone","article_id":"2419719613","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1458140515/image_1458140515.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2419719613","pubTimestamp":1710580465,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"takasuu The AI and semiconductor boom has been lucrative for investors in the right stocks and funds. Those brave enough to leverage the gains in funds such as the ProShares Ultra Semiconductors ETF (","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","BK4587":"ChatGPT概念","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0289961442.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"AX\" (SGD) ACC","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU0444971666.USD":"天利全球科技基金","BK4141":"半导体产品","BK4550":"红杉资本持仓","BK4551":"寇图资本持仓","BK7104":"黄金","NVDA":"英伟达","BK4561":"索罗斯持仓","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","BK4099":"汽车制造商","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU0238689110.USD":"贝莱德环球动力股票基金","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","TTM.AU":"TITAN MINERALS LTD","BK4548":"巴美列捷福持仓","LU0072462426.USD":"贝莱德全球配置 A2","FDN":"First Trust Dow Jones Internet I","BK4529":"IDC概念","SOXX":"iShares费城交易所半导体ETF","LU0080751232.USD":"富达环球多元动力基金A","LU0056508442.USD":"贝莱德世界科技基金A2","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","BK4554":"元宇宙及AR概念","TTM":"塔塔汽车","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","QQQ":"纳指100ETF","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","LU0234572021.USD":"高盛美国核心股票组合Acc","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU0109392836.USD":"富兰克林科技股A","BK4567":"ESG概念","USD":"ProShares Ultra Semiconductors","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","LU0353189763.USD":"ALLSPRING  US ALL CAP GROWTH FUND \"I\" (USD) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC"},"translate_title":"美元：它的时代来了又走了","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"USD":1,"TTM.AU":1,"TTM":1,"SOXX":1,"QQQ":1,"NVDA":1,"FDN":0.76},"content_text":"takasuu The AI and semiconductor boom has been lucrative for investors in the right stocks and funds. Those brave enough to leverage the gains in funds such as the ProShares Ultra Semiconductors ETF (NYSEARCA:USD) have done even better. However, the recent reversal in Nvidia (NVDA) has fired a warning shot that every rally has a limit. It doesn't necessarily mean a top is in place, but I do think a consolidation/dip and slower rally are now more likely. USD could therefore underperform and this article explores if there are safer ways of investing in this theme as it enters a new phase. High Risk/High Reward There is an ETF for every idea and every situation. Some are niche, and some have a limited timeframe. USD has been in the right time and place to capitalize on the rally in semiconductors, and specifically NVDA's success. As per the fund page, ProShares Ultra Semiconductors seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the Dow Jones U.S. SemiconductorsSM Index. The underlying Index is float-adjusted market cap weighted and holds 34 stocks. However, USD has 46 positions in order to leverage the results with derivatives such as swaps. Note its position in NVDA is nearly 30% of the fund. USD Holdings (Seeking Alpha) This is clearly a high-risk portfolio. Notwithstanding the leverage, the PE ratio of the Index is a lofty 58 according to the factsheet. Even when strong growth is factored in, a projected PE ratio of 34 suggests gains could be limited from here. A Price/Sales ratio of over 10 also indicates the Index is priced high. Dow Jones U.S. Semiconductors Index (SP Global) High risk obviously gives the opportunity for high rewards, and this has been the case recently, especially since October 2023. However, there is not a consistent outperformance and USD is not a fund to hold long-term. When the trend slows and rolls over, losses can mount up quickly. A Check on Performance USD's total return is outstanding during strong rallies. It has delivered much more than the advertised 2x gains of the underlying Index since October 2023. Data by YCharts This is explained on the fund page. For any holding period other than a day, your return may be higher or lower than the Daily Target. These differences may be significant. Smaller index gains/losses and higher index volatility contribute to returns worse than the Daily Target. Larger index gains/losses and lower index volatility contribute to returns better than the Daily Target. USD also outperforms the unleveraged iShares Semiconductor ETF (SOXX) by over three times. Data by YCharts Of course, losses are also magnified as the below chart shows. Data by YCharts Big losses take longer to recover, even at two times leverage. While USD was breaking even from the 2022 drawdown, NVDA was already 51% higher. Data by YCharts The negative effect of compounding is the major risk with holding USD or any leveraged fund as the below graphic from Investopedia shows. Compounding (Investopedia) We can see this in the recent reversal. USD fell -19.5% and needs to gain +15.5% to reach the previous high. Risk of a Reversal Strong trends cannot continue forever. As shown earlier, the PE ratio (TTM) of the Index is already 58 and Price/Sales is over 10. At some point, the rally needs to pause and consolidate its gains. Assuming earnings of NVDA (and other holdings) continue to grow, and price make a slight dip, these figure will come down to more attractive levels (say around a PE of around 30-35, more in line with the Nasdaq (QQQ) at the moment). This should set up the next leg higher. I think this process has started and we could see a sideways/down movement in USD similar to July-October last year. The big tell comes from NVDA's price action on the 8th March. An initial gap higher and rally on the open propelled the stock over 5% higher only for it to reverse sharply and close lower. From top to bottom, the session range was -11.5% and the volume was twice the normal. NVDA Daily Chart (TradingView) A similar pattern unfolded in USD and other related funds and stocks. One of the key aspects to this reversal is that it wasn't ignited by any specific bad news for NVDA - rather, it seems the rally got stretched and it snapped back sharply when buyers dried up. I think the March top now marks a place where we can say \"the price is too high\" and any further rally will struggle to break the $974 peak. Should we now see a consolidation/dip into the next earnings season, USD could well shed 20-30% and then struggle to catch up with the next rally. An unleveraged fund like SOXX or even NVDA itself is a safer way stay exposed to this sector with less risk to capital. Risks The main risk to this view is that USD has already bottomed with the March 8-9th drop and is already in the next leg of the rally. If this is the case, it should break to new highs above $113.46 and then ideally hold this level as support. I do think this is unlikely, but \"hot\" sectors and stocks often exceed expectations. Sentiment is a powerful driver of rallies and fundamentals such as valuations can be overlooked temporarily. Conclusions  There is an ETF for everything and USD fulfilled its purpose perfectly as it leveraged the rally in semiconductors since the October '23 low. However, risks are rising as NVDA and the underlying index are looking overvalued and in need of a consolidation. The March 8th reversal suggests this correctional phase could be underway and this would make USD a fund to avoid as a flat or down market will deliver outsized losses.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2419719613"}