The Financial Times reports investors funneled nearly $7bn of net inflows in
July and the first two weeks of August into Direxion Daily Semiconductor Bull 3X
Shares, the largest leveraged ETF tracking the NYSE Semiconductor Index (30 US
chip names), offering 3x exposure. The underlying index is down over 20% from
its peak, and the ETF plunged about 70% from its June peak to the subsequent
low, Morningstar data show. Leveraged single-stock funds tied to SK Hynix and
SanDisk also drew substantial inflows during and after the sell-off. Goldman
strategist Snyder described buy-the-dip/sell-the-rip as a common leveraged-ETF
tactic; Barclays derivatives head Angupta warned buying dips can be like
catching a falling knife.
