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Competition Is Heating Up In The Triple Leveraged ETF World (FAZ, FAS, UPRO, SPXU)

|Includes:FAS, Direxion Daily Financial Bear 3x Shares ETF (FAZ), SPXU, UPRO

The world of leveraged ETF’s has been heating up as Proshares has launched their two new triple ETF’s.  Direxion a competing sponsor already has several leveraged products in this field.  The triple leveraged products have become extremely popular to investors, as it allows them to trade with leverage at a  low expense.  These ETF sponsors seem to see a trend happening and don’t want to miss out on opportunities in potential profits from investors.

These leveraged ETF’s have also raised many eyebrows.  FINRA -The Financial Industry Regulatory Authority   has recently urged caution to the financial industry on leveraged and inverse ETF’s.  FINRA warned financial brokers and advisers about their fiduciary responsibilities to investors, on how these inverse and leveraged ETF’s are difficult to understand and are not meant to be held for long periods of time. Education is key to these products and retail investors currently lack knowledge in them. 

FAZ and FAS are long and short 3X ETF’s sponsored by Direxion that track the Russell 1000 Financial Services Index.  These two ETF’s together frequently trade 400+ million shares a day, proving there is a ton of money at stake in this business. 

The new long/short 3X ETF’s that Proshares has launched will track the S&P 500 Index.  To spice things up, Proshares has launched the new 3X  ETF’s with four letter symbols UPRO & SPXU.  This will add some confusion because currently most ETF’s are three letter symbols.

Disclosure: No positions