Is leveraged ETF useful?

11 Aug 2010

Perhaps we just hear leveraged ETF. For Professional investor, this investment is very famous. The ETF must be different with other ETF. This ETF allow the investors to get outsized return. Unfortunately, not all people can use this investment. It is because this investment is very complicated. The new investor should learn about this investment first.

This investment use some derivatives to get high return such as option, swap, and others. This ETF does not use long or short to achievement investment goal like other ETF does. For ordinary people like us, it is difficult to use derivatives tool.

By using some derivatives, they have to pay other transaction fee. Certainly, It eat your investment return. Some leveraged index may produce negative index when the index it tracks moved up. You should be careful with this investment especially the beginner. This investment is very high risk. You can put small portion money at this investment if you like it.


TAGS derivatives etf option leveraged ETF swap transaction fee fee



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