The volume on Direxionshares' 3x leveraged bull and bear financial ETFs shows that traders love the product. However, the ETFs have returned some crazy numbers this year. The 3x ETFs provide 3 times the daily change of the underlying index, and year to date, the financial index that FAS (long) and FAZ (short) track is down 14%. However, the 3x long ETF (FAS) is down 68% year to date, but the 3x short ETF (FAZ) is down 65%! And since the lows on March 9th, these things have returned some whopping numbers. FAS is up 195%, while FAZ is down $102.78 (or 87%). Rest assured that a lot of people have gotten burned with these leveraged ETFs, and even though they're meant to track daily performance, their crazy longer-term returns won't go unnoticed forever.
The Direxion funds theirselve make a killing off of the GAPs for any unsuspecting person who was unfortunate enough not to read the perspective and know that it is a daily trading ETF only.
Posted by: Donald | April 09, 2009 at 08:06 PM
I was looking for some information in the web about the ETF for a school test, but I think this is way too much complicated to me. Thanx anyway. Very useful, although hard to get to me.
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