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Five Facts Every Investor Should Know About Leveraged ETFs

Michael Johnston — Thu, 30 Sep 2010 15:00:27 +0000

In recent years, few corners of the investing world have been the subject of as much controversy, misinformation, and confusion as the leveraged ETF space. Last summer these securities received widespread coverage from the financial media, much of it either implying directly or alleging that leveraged ETFs were flawed investment vehicles designed to dupe average investors out of their money. That prolonged debate over the merits of leveraged funds was somewhat frightening–it highlighted the ignorance of some well-respected publications–but the end result seemed to be an increased emphasis on investor education and a clearer understanding of what leveraged ETFs are and are not designed to do. Now it seems that conclusion may have been a bit naive. Some state securities regulators are including leveraged ETFs on their watch lists of “investor traps,” lumping them in with variety of investment scams. And recent stops on the conference tour have included some [...]

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March ETF Roundup: Launches, Filings, and Closures

Seth Dowling — Thu, 01 Apr 2010 16:02:54 +0000

After a few speed bumps early in 2010, ETFs are back on track and traveling full steam ahead. In the first three months of 2010, nearly 60 new ETFs have been launched, which is already equivalent to nearly half funds to hit the market over the course of 2009. The recent SEC decision to halt approval on products using derivatives may slow this pace a bit, but April promises to be another very active month for new ETF launches. Below, we highlight some of the most interesting new funds hitting the market. New ETFs Highlights from the ETF industry in March include: Claymore, best known for themed ETFs and targeted sector funds, mixed things up when by releasing three new ETFs based on broad market indexes. The new funds include the Wilshire 5000 Total Market ETF (WFVK), Wilshire 4500 Completion Index ETF (WXSP), and Wilshire U.S. REIT ETF (WREI). Following the launch of 3x funds earlier in the year, Direxion hit [...]

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Direxion Brings 3x Leveraged ETFs To Europe

Michael Johnston — Wed, 31 Mar 2010 14:44:28 +0000

Direxion, the pioneer of 3x and -3x daily leveraged ETFs in the U.S., is going international. Beginning on March 31, six Direxion Shares Daily ETFs will be listed on the Amsterdam market of NYSE Euronext, significantly expanding the base of investors with access to these products. The Direxion ETFs available on this market include daily 3x and -3x ETFs targeting the MSCI Emerging Markets Index, Russell 1000 Index, and Russell 1000 Financial Services Index: Daily Emerging Markets Bull 3x Shares (EDC) Daily Large Cap Bull 3x Shares (BGU) Daily Financial Bull 3x Shares (FAB) Daily Emerging Markets Bear 3x Shares (EDZ) Daily Large Cap Bear 3x Shares (BGZ) Daily Financial Bear 3x Shares (FAZ) Each of these products is already listed in the U.S., and all but one of them trade under the same ticker symbol stateside (the 3x bull financial fund is listed as “FAS” in the U.S.). It’s [...]

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ProShares Plans 300% Leveraged ETFs

Michael Johnston — Mon, 08 Feb 2010 22:13:24 +0000

ProShares, the issuer responsible for pioneering leveraged and inverse ETFs, has filed prospectuses for 16 new funds. Expansion is nothing new for ProShares–the company has launched a handful of new ETFs over the last year–but the filing was interesting because it detailed plans for 300% leveraged ETFs. ProShares’ current product line, which consists of more than 90 funds, includes only two ETFs with 300% leverage, the UltraPro S&P 500 (UPRO) and UltraPro Short S&P 500 (SPXU). Historically, ProShares has focused on inverse, 200% leveraged and 200% inverse leveraged ETFs, although the issuer expanded its offerings outside this area last year when in introduced the first 130/30 ETF. Several of the proposed funds, which are based on domestic and international equities and fixed income ETFs, would compete directly with existing products from Direxion. ProShares’ Proposed 3x Leveraged ETFs Style 300% ETF -300% ETF NASDAQ UltraPro QQQ UltraPro Short QQQ DJIA UltraPro [...]

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Top Ten Performing Leveraged ETFs Of 2009

Michael Johnston — Fri, 18 Dec 2009 16:56:06 +0000

Leveraged ETFs were in the headlines a great deal in 2009, but most of the coverage was less than favorable. Misinformation on these products was widespread throughout the year, leading to confusion on many aspects of these products and some unfair generalizations. One of the primary points of discussion was the performance of leveraged ETFs when held by investors for extended periods of times. Because these funds focus on delivering amplified returns on a daily basis, returns over time are compounded, meaning that the effective return over multiple sessions depends not only on the change in the underlying benchmark, but in the path of the index during that period. In trending markets, the return to leveraged ETFs will generally be greater than the simple target multiple times the return on the underlying index. But in seesawing markets — one where gains are frequently followed by losses and vice versa — [...]

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Definitive Guide to BRIC ETFs: BRIC ETF Investing 101

Eric Dutram — Wed, 28 Oct 2009 12:00:18 +0000

With sluggish growth forecasted for the next few quarters an unemployment rate quickly approaching 10%, many U.S. investors are looking beyond their borders for new investment opportunities. While developed European and Asia Pacific economies have received a significant amount of attention, the most popular investment destinations remain the four largest emerging market countries: Brazil, Russia, India, and China, collectively known as the “BRIC” economies. Together, these four countries currently comprise 40% of the world’s population and 15% of GDP, ensuring that they will be a force to be reckoned with on the global stage for years to come. Meanwhile, combined foreign reserves total over $3.1 trillion, potentially allowing these countries to influence world trade and push politics more towards a multipolar world. Historically, it has difficult for many American investors to access BRIC equity markets directly; most have relied primarily on the few stocks that trade as American Depository Receipts [...]

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ETF Database » EDC

Five Facts Every Investor Should Know About Leveraged ETFs

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March ETF Roundup: Launches, Filings, and Closures

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Direxion Brings 3x Leveraged ETFs To Europe

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ProShares Plans 300% Leveraged ETFs

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Top Ten Performing Leveraged ETFs Of 2009

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Definitive Guide to BRIC ETFs: BRIC ETF Investing 101

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