Bear market etf 3x?
About Direxion Daily S&P 500® Bear 3X ETF
The investment seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the daily performance of the S&P 500® Index.
About Direxion Daily S&P 500® Bear 3X ETF
The investment seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the daily performance of the S&P 500® Index.
Leveraged 3X Long/Bull ETFs are funds that track a wide variety of asset classes, such as stocks, bonds and commodity futures, and apply leverage in order to gain three times the daily or monthly return of the underlying index.
The TQQQ is a 3x leveraged ETF based on the QQQ (a Nasdaq-100 Index ETF). Because it is leveraged, it uses derivatives contracts to amplify its returns based on how the index performs.
What is TNA? The Small Cap Bull 3X ETF seeks daily investment results before fees and expenses of 300% of the price performance of the Russell 2000 Index (Small Cap Index). There is no guarantee the fund will meet its stated investment objective.
Because leveraged single-stock ETFs in particular amplify the effect of price movements of the underlying individual stocks, investors holding these funds will experience even greater volatility and risk than investors who hold the underlying stock itself.
The ProShares UltraPro Short QQQ (SQQQ) is a 3x leveraged inverse ETF that tracks the Nasdaq 100. It seeks to return the exact results of the Nasdaq 100 index times negative three. This ETF follows the Nasdaq 100, which is heavily weighted toward technology and telecommunications stocks.
| Symbol Symbol | ETF Name ETF Name | 1 Year 1 Year |
|---|---|---|
| TQQQ | ProShares UltraPro QQQ | 169.43% |
| SOXL | Direxion Daily Semiconductor Bull 3x Shares | 144.94% |
| TMF | Direxion Daily 20+ Year Treasury Bull 3X Shares | -37.82% |
| SPXL | Direxion Daily S&P 500 Bull 3X Shares | 59.06% |
A leveraged ETF uses derivative contracts to magnify the daily gains of an index or benchmark. These funds can offer high returns, but they also come with high risk and expenses. Funds that offer 3x leverage are particularly risky because they require higher leverage to achieve their returns.
Yes, although most would liquidate before they got there, paying shareholders off at some non-zero price. For example, suppose a 3x levered ETF is initially offered at $100/share. Even if the underlying declined by more than 33%, the ETF price would not be zero, because it rebalances daily.
Are there 4x leveraged ETF?
Bank of Montreal launched the Max SPX 500 4x leveraged ETNs, which will be the highest leveraged exchange traded product in the U.S., according to CFRA.
While the Fund has a daily investment objective, you may hold Fund shares for longer than one day if you believe it is consistent with your goals and risk tolerance. For any holding period other than a day, your return may be higher or lower than the Daily Target. These differences may be significant.
The objective of the ETP Securities is to provide 5 times the value of the daily performance of the SPDR S&P 500 ETF Trust Exchange Traded Fund, net of fees and expenses. The ETP securities seek to pursue the 5x Long US 5.
The Bottom Line. Given the volatility that is inherent in financial markets, only investors who have the time to pay attention to these investment vehicles should consider allocating a small portion of their investments into 3x leveraged ETFs.
Direxion launched its first leveraged ETFs in 2008. In November 2008 the company was the first to offer ETFs with 3X leverage, a move that was copied some months later by its competitors ProShares and Rydex Investments.
Investment Objective
ProShares UltraPro S&P500 seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the S&P 500®.
Leveraged ETFs amplify daily returns and can help traders generate outsized returns and hedge against potential losses. A leveraged ETF's amplified daily returns can trigger steep losses in short periods of time, and a leveraged ETF can lose most or all of its value.
If you held underlying index XYZ directly and then levered it up three times directly with your broker dealer, the losses could potentially cause your position to fall below zero. In other words, you could potentially be liable for more than you invested because you bought the position on leverage.
They are short term trading instruments. If you hold them for the long term, you are literally leaving returns behind. The mandate states that: (This is important!) ETF is designed to track the daily performance of the index.
Historical data shows that leveraged ETFs can experience significant losses during market downturns, and negative returns can accumulate over time. Indicators suggest that a bubble may be forming in the Nasdaq-100 and that a recession could be on the horizon, making investing in TQQQ too risky.
Should I invest in VOO or QQQ?
QQQ - Performance Comparison. In the year-to-date period, VOO achieves a 1.49% return, which is significantly lower than QQQ's 2.85% return. Over the past 10 years, VOO has underperformed QQQ with an annualized return of 12.21%, while QQQ has yielded a comparatively higher 17.94% annualized return.
For investors seeking an alternative to QQQ's mega-cap exposure, the Invesco S&P 500 Top 50 ETF (XLG) is an excellent option.
The largest Aggressive ETF is the iShares Core Aggressive Allocation ETF AOA with $1.77B in assets. In the last trailing year, the best-performing Aggressive ETF was EAOA at 11.96%. The most recent ETF launched in the Aggressive space was the iShares ESG Aware Aggressive Allocation ETF EAOA on 06/12/20.
| Symbol | Name | 5-Year Return |
|---|---|---|
| PSI | Invesco Semiconductors ETF | 26.24% |
| XLK | Technology Select Sector SPDR Fund | 26.19% |
| FTXL | First Trust Nasdaq Semiconductor ETF | 25.22% |
| IYW | iShares U.S. Technology ETF | 25.16% |
The largest Active Management ETF is the JPMorgan Equity Premium Income ETF JEPI with $30.71B in assets. In the last trailing year, the best-performing Active Management ETF was NVDL at 406.06%. The most recent ETF launched in the Active Management space was the T-Rex 2X Long Apple Daily Target ETF AAPX on 01/11/24.
