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ETFs
Fees, returns and holdings.
Find the ETFs that fit you.
Leveraged ETFs
Leveraged ETFs use derivatives to amplify daily index returns (2x or 3x). Inverse ETFs also exist that profit from declines.
Why invest
Short-term speculation. Portfolio hedging with inverse. Warning: NOT suitable for long-term investing.
How to choose
These products are designed for day trading only. "Compound decay" erodes returns over longer periods.
Best account
Non-registered — Frequent losses can be deducted from gains in a taxable account.
Why are leveraged ETFs not suitable for long-term?
"Compound decay" erodes returns over time. A 2x ETF that gains 10% then loses 10% doesn't return to zero but to -2%. The higher the volatility, the greater the loss.
Can I use an inverse ETF to protect my portfolio?
Inverse ETFs (SH, PSQ) can serve as very short-term hedges, but compound decay makes them ineffective beyond a few days. For lasting protection, bonds or gold are better options.
Leveraged ETFs
Leveraged ETFs use derivatives to amplify daily index returns (2x or 3x). Inverse ETFs also exist that profit from declines.
Why invest
Short-term speculation. Portfolio hedging with inverse. Warning: NOT suitable for long-term investing.
How to choose
These products are designed for day trading only. "Compound decay" erodes returns over longer periods.
Best account
Non-registered — Frequent losses can be deducted from gains in a taxable account.
Why are leveraged ETFs not suitable for long-term?
"Compound decay" erodes returns over time. A 2x ETF that gains 10% then loses 10% doesn't return to zero but to -2%. The higher the volatility, the greater the loss.
Can I use an inverse ETF to protect my portfolio?
Inverse ETFs (SH, PSQ) can serve as very short-term hedges, but compound decay makes them ineffective beyond a few days. For lasting protection, bonds or gold are better options.
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