bsharvy

Grading Leveraged ETF Performance

Rydex has some of these funds too, and with lower fees.

Understanding Triple Leveraged ETFs

That makes absolutely no sense. They are rebalanced every day, therefore, the leverage is 3x every day. Your leverage after holding them a while can't be any different from someone who just bought them. The shares are identical.

On Apr 08 01:22 PM Ron Rowland wrote:

> The reason these things work this way is because the daily reset
> of the leverage results in higher "effective" leverage every day
> the trend continues to move in your direction.
>
> For example, say you buy a 3x fund that moves in your direction for
> a few weeks and you are now sitting on a 100% gain. At that time
> your leverage is about 6x from where you started. And most importantly,
> it is at 6x at the worst possible time - when the trend reverses.
> So now you have 6x leverage working against you.

Understanding Levered ETFs and Geometric Returns

I don't see an explanation of why the expected geometric return of an inverse ETF isn't just -1 times the return of the equally levered long ETF.

A Skeptic on Leveraged ETFs

As an investor, I'm mainly concerned with biased slippage. If the ETF underperforms in one direction but not the other, then there is a change in the risk. If the mis-performance is equally bearish and bullish, I'm not so concerned.