Recent Winners and Losers on the Leveraged ETF Front

Leveraged ETFs have seemingly taken over the exchange traded fund asset class in recent months, and below we highlight the best and worst performers since the November 20th market low. As shown, the double long real estate ETF is up the most since 11/20 with a gain of 97% (URE)! The triple long financial ETF (FAS) ranks 2nd with a gain of 86%, followed by 2x basic materials (UYM), 3x smallcaps (TNA), and 2x financials (UYG).

On the downside, the triple short financials ETF (FAZ) and the double short real estate ETF (SRS) are both down about the same at -79%. Double short China (FXP) is down the third most at -66%, followed closely by the double short Rydex financial ETF (RFN) at -64.9%.

One thing is for sure -- these leveraged ETFs aren't lacking volatility.

click to enlarge

Comments

[discov:]

getting back into FAZ via options. FAY DH.

concisetrading.blogspo.../
Ryan

Jan 02 02:36 AM

[Kunst:]

These ultra & ultrashort ETFs are extremely dangerous if you hold them for any length of time. Run some charts and you will see.

Examples, 1/1-12/29/08:
China: FXI and FXP are both down 50%.
Oil industry: DUG is down 25% and DIG is down 75%.
Financials: UYG is down 85%, SKF is up 25%.
Real estate: URE is down 80%, SRS is down 45%.

DOG (ProShares 1x short Dow 30) is up 20%, DXD (same except 2x) is only up 15%. The single-leverage did better than the double!

If you hold on to these ETFs for more than a few days, you are on a losing track. Beware!

Jan 03 02:05 AM