Interested in leveraged ETFs?
In the U.S. equity
universe, Exchange Traded Funds have occupied a strong position being a popular security among traders and investors. The choice of putting one's money in ETFs is pretty clear, since they offer many benefits in terms of taxes, costs, dividends and also intraday
price fluctuations, which is convinient
for speculative investors.
One more good thing about ETFs is their leveraging tactics. This means that a leveraged ETF employs financial derivates
and debt, aside from the price variations of the index it follows. To put it more simply, a leveraged ETF increases by a double or triple amount as the index it tracks. However, it's not so perfect, and the downside of the leverage is that it works the other way as well, so if the index followed declines, the fund loses even more ground.
With this in mind, let's take a look at some of the biggest and highest returning leveraged ETFs, in terms of AUM and year-to-date returns, in a style similar to our coverage of short ETF
s. ProShares Trust (NYSEARCA:TBZ)
, which tracks the Barclays Capital U.S. 3-7 Year Treasury Bond Index, is a member of the list, has a year-to-date return 3.3% and over $4 million in assets under management.
data by YCharts
Read on to see the list of more leveraged ETFs