Inverse ETFs
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- Roundtable Knight
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Inverse ETFs
I'm looking at a stock screener report that shows a bunch of the inverse ETFs with significant price increases over the past 12 months, but the total return is noted as negative or near 0. Is something happening under the hood of these inverse ETFs that is not readily apparent?
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- Full Member
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- Joined: Fri May 08, 2015 8:40 am
Re: Inverse ETFs
Market is facing a turmoil and there are many possibilities for this ripple.
Re: Inverse ETFs
Levi, Greetings . . . ,
Are the inverse ETF's you mention, leveraged inverse ETF's ? (i.e. 2x or 3x the underlying index)
If so then you will find that these can be lousy 'investments' over the long term (as you point out above)
How so?
See these links for an explanation of the mathematics involved & how their performance may be adversely affected;
http://tsi-blog.com/2014/11/why-leverag ... rm-trades/
and
http://tsi-blog.com/?s=inverse+ETF&x=0&y=0
Are the inverse ETF's you mention, leveraged inverse ETF's ? (i.e. 2x or 3x the underlying index)
If so then you will find that these can be lousy 'investments' over the long term (as you point out above)
How so?
See these links for an explanation of the mathematics involved & how their performance may be adversely affected;
http://tsi-blog.com/2014/11/why-leverag ... rm-trades/
and
http://tsi-blog.com/?s=inverse+ETF&x=0&y=0