Quote:
Originally Posted by Smokey_The_Bear
I'll bite.
What's causing this? I guess I've seen the commodity ones, learned about Contango and thought that carried over to all leveraged ETF's. What's with the sub-par performance? And what's going on in this table?
there's no subpar performance in that table. that's how the math works out. in the absence of trading costs, a 3x leveraged ETF will gain >3x in a trending market and will return <3x in a choppy market.
in reality leveraged ETFs perform a lot worse than that because they have to trade every day. as assets under management and volatility in the underlying increase, the slippage increases too. that's why they often severely underperform their theoretical returns.