Leveraged ETFs Beat Margin

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Leveraged ETFs are convenient, but are they more efficient and effective than traditional margin leverage? In this report we compare performance of both in up and down markets and consider qualitative differences. Overall, we find that leveraged ETFs are still the preferred method for making big bets on market direction.

Traditionally leverage is obtained by borrowing money from a broker at margin loan rates and then either buying an ETF or selling it short. Alternatively, one can buy so-called leveraged ETFs which contain all leverage and margin costs. They come in long and short flavors and typically ratchet leverage up by a factor of two or three.

First let us compare how the two strategies handle the ubiquitous S&P 500 in bull and bear markets. On the one hand we buy SPDR 500 (NYSEArca:SPY), the giant S&P 500 ETF, once with cash on hand and again on margin for double exposure. On the other hand we buy Rydex 2x S&P 500 (NYSEArca:RSU), a leveraged ETF targeting double daily returns (discussed later). RSU wins handily in the bear market of 2008 and just slightly in the March 2009 bull run:

Bear market: 2008 Bull market: March 9-31
SPY return - 34.6% 17.6%
SPY 2X -69.2% 35.2%
less 5% margin 5.0% 0.3%
net return -74.2% 34.9%
vs. RSU -65.2% 36.5%

Bear market: 2008 Bull market: March 9-31
SPY return - 34.6% 17.6%
SPY 2X -69.2% 35.2%
less 5% margin 5.0% 0.3%
net return -74.2% 34.9%
vs. RSU -65.2% 36.5%
Bear market: 2008 Bull market: March 9-31 Bear market: 2008 Bull market: March 9-31 SPY return - 34.6% 17.6% SPY return - 34.6% 17.6% SPY 2X -69.2% 35.2% SPY 2X -69.2% 35.2% less 5% margin 5.0% 0.3% less 5% margin 5.0% 0.3% net return -74.2% 34.9% net return -74.2% 34.9% vs. RSU -65.2% 36.5% vs. RSU -65.2% 36.5%

When we consider a shorting scenario, results are mixed. Here we compare Rydex 2x Inverse S&P 500 (NYSEArca:RSW) which targets the inverse of double daily S&P 500 returns against a double short position where cash on hand is posted as collateral to short once and another short position is made with a margin loan. RSW trails by 8% during the 2008 bear market and wins in the 2009 spring bull market by 4%.

Bear market: 2008 Bull market: March 9-31
SPY return 34.6% -17.6%
SPY 2X 69.2% -35.2%
less 5% margin 5.0% 0.3%
net return 64.2% -35.1%
vs. RSW 56.3% -31.5%

Bear market: 2008 Bull market: March 9-31
SPY return 34.6% -17.6%
SPY 2X 69.2% -35.2%
less 5% margin 5.0% 0.3%
net return 64.2% -35.1%
vs. RSW 56.3% -31.5%
Bear market: 2008 Bull market: March 9-31 Bear market: 2008 Bull market: March 9-31 SPY return 34.6% -17.6% SPY return 34.6% -17.6% SPY 2X 69.2% -35.2% SPY 2X 69.2% -35.2% less 5% margin 5.0% 0.3% less 5% margin 5.0% 0.3% net return 64.2% -35.1% net return 64.2% -35.1% vs. RSW 56.3% -31.5% vs. RSW 56.3% -31.5%

Now we turn to the closely watched sector of financials. Here we compare ProShares Ultra Financial ( UYG ), which tracks double daily returns of the Dow Jones Financial Index, against going long twice on iShares Dow Jones US Financial Sector ETF (NYSEArca:IYF), which tracks the same index without leverage. UYG wins handily during the 2008 bear market and again less dramatically during the Spring 2009 bull market:

Bear market: 2008 Bull market: March 9-31
IYF return -47.7% 35.6%
IYF 2X -95.3% 71.2%
less 5% margin 5.0% .3%
net return -100.3% 69.9%
vs. UYG -83.3% 74.0%

Bear market: 2008 Bull market: March 9-31
IYF return -47.7% 35.6%
IYF 2X -95.3% 71.2%
less 5% margin 5.0% .3%
net return -100.3% 69.9%
vs. UYG -83.3% 74.0%
Bear market: 2008 Bull market: March 9-31 Bear market: 2008 Bull market: March 9-31 IYF return -47.7% 35.6% IYF return -47.7% 35.6% IYF 2X -95.3% 71.2% IYF 2X -95.3% 71.2% less 5% margin 5.0% .3% less 5% margin 5.0% .3% net return -100.3% 69.9% net return -100.3% 69.9% vs. UYG -83.3% 74.0% vs. UYG -83.3% 74.0%

Despite this apparent edge in past returns, we caution that IYF has all the makings of an ETF which arbitrageurs might exploit. First, IYF is relatively large at $400 Million in assets, more than twice the size of RSU. Second, the financial sector futures market in which IYF operates is a small fraction of the S&P 500 futures market, which makes up more than 2/3rds of all stock futures trading. IYF has to roll over a huge number of contracts at the end of every day with few counterparties, and arbitrage traders know it is coming. In the right environment they can step in front of IYF with little risk and push up prices of futures it will need to buy and push down prices of futures it will need to sell. The arbitrageurs can literally steal the ETF's profits.

This is more than conjecture. In 2009 hedge fund traders have openly boasted of doing these kinds of moves to leveraged sector ETFs. Similarly, well-documented episodes have plagued USO, the crude oil tracking stock. For any sizable leveraged ETF operating in a relatively small market, arbitrageurs are likely to reduce profits.

These quantitative results are admittedly anecdotal, but they match a pattern we have seen in two previous reports. Every time we have examined leveraged ETFs, they have shown to be far from perfect, but on average they have beaten margin leverage head-to-head in returns. We have also found a fair degree of random variation. Margin can win solidly at times.

A note on key assumptions: low loan costs are critical for the success of traditional margin leverage. Here we used a rate (5%) charged by ETrade for sums of $250,000-$1,000,000, but rates change all the time and depend on amount borrowed and the broker providing them. These are historically low rates so it is difficult to argue that waiting for better rates will help margin leverage.

Any edge which leveraged ETFs might have in bear markets is crucial, and they certainly demonstrated an edge in this recent bear market for the ages. One of the perverse laws of investment arithmetic is that a loss of 50% has to be made up with a gain of 100%. This is why 2008 was so devastating to investors and why Spring of 2009 brought only modest consolation. The extreme example of this arithmetic can be seen in the last comparison above involving financials ETFs UYG and IYF (on margin). Sadly, margin investors of IYF were completely wiped out during 2008 and would have had to post additional collateral to be able to enjoy the benefits of the 2009 Spring rebound.

So far we have compared ETF vs. margin strategies in terms of quantitative returns, but there are also various qualitative differences to consider. Some are obvious, others more subtle.

An obvious difference mentioned above is that leveraged ETFs generally follow (as best they can) daily returns of an index, not overall returns for a period. Compounding of these daily returns should amplify leverage. Also, daily returns often mean just that. Price movements which occur after trading hours are not counted in daily returns as they are with standard index returns. This would tend to depress leverage. For instance, consider a week of trading with the following daily and weekly returns for a hypothetical index:

The benchmark index went from 100 to 109 in five days of trading. But an ETF tracking daily trading ended at about 108, one point less in only 5 days. How did that happen? Sudden movements after trading hours which followed the momentum of the market but were not captured in daily returns.

Other subtle differences exist. Leveraged ETFs tracking the inverse of an index can never lose more than their original principal whereas equivalent margin short positions expose the investor to theoretically unlimited losses. And margin requirements mean that collateral impacts other parts of an investor's portfolio, whereas leveraged ETFs require no collateral and do not impact the rest of the portfolio. A brokerage firm which may require $1.20 collateral for $1 in margin of a broad index ETF may require as much as $4 to $5 of collateral for a riskier ETF.

On the other hand, leveraged ETFs have some exposure to counterparty risk which tends to come out in times of financial crisis like now. Leveraged ETFs may invest directly with stocks, but more commonly they will purchase index futures or swaps, which depend on the ability of a counterparty to deliver on their promises. If the ETF fund manager is careful to ensure that the counterparty has posted adequate collateral (such as through a brokerage firm) then there is little to worry about, but if there were any time to have concerns about systemic counterparty failure, it would be in the current financial crisis.

We would summarize these qualitative differences in a word: simplicity. Traditional leverage, from the investor's point of view, is complicated, messy, and inconvenient. A leveraged ETF, although internally complicated, is simplicity itself from the point of view of an investor. It involves one purchase of a liquid security and no other maintenance or oversight other than deciding when to unwind, with one sell order. On a cautionary note, this convenience means that more investors are likely to consider leveraged ETFs than margin. Some probably shouldn't. All of these products are volatile and strictly for alert, experienced traders.

Leveraged ETFs may not replicate traditional margin leverage, but they deliver an approximation with strong comparitive performance in a far simpler format. They are clearly a step ahead of traditional margin leverage.

There are nearly one hundred leveraged ETFs, including:

  • Direxion Energy Bear 3x Shares ETF (NYSEArca:ERY), annual fees: 0.95%
  • Direxion Energy Bull 3x Shares ETF (NYSEArca:ERX), annual fees: 0.94%
  • Direxion Financial Bear 3x Shares ETF (NYSEArca:FAZ), annual fees: 0.94%
  • Direxion Financial Bull 3x Shares ETF (NYSEArca:FAS), annual fees: 0.94%
  • Direxion Large Cap Bear 3x Shares ETF (NYSEArca:BGZ), annual fees: 0.95%
  • Direxion Large Cap Bull 3x Shares ETF (NYSEArca:BGU), annual fees: 0.95%
  • Direxion Mid Cap Bear 3x Shares ETF (NYSEArca:MWN), annual fees: 0.95%
  • Direxion Mid Cap Bull 3x Shares ETF (NYSEArca:MWJ), annual fees: 0.95%
  • Direxion Small Cap Bear 3x Shares ETF (NYSEArca:TZA), annual fees: 0.95%
  • Direxion Small Cap Bull 3x Shares ETF (NYSEArca:TNA), annual fees: 0.95%
  • ProShares Short Dow30 ETF (NYSEArca:DOG), annual fees: 0.95%
  • ProShares Short MidCap400 ETF (NYSEArca:MYY), annual fees: 0.95%
  • ProShares Short MSCI EAFE ETF ( EFZ ), annual fees: 0.95%
  • ProShares Short MSCI Emerging Markets ETF ( EUM ), annual fees: 0.95%
  • ProShares Short QQQ ETF ( PSQ ), annual fees: 0.95%
  • ProShares Short Russell2000 ETF (NYSEArca:RWM), annual fees: 0.95%
  • ProShares Short S&P 500 ETF ( SH ), annual fees: 0.95%
  • ProShares Short SmallCap600 ETF ( SBB ), annual fees: 0.95%
  • ProShares Ultra Basic Materials ETF ( UYM ), annual fees: 0.95%
  • ProShares Ultra Consumer Goods ETF ( UGE ), annual fees: 0.95%
  • ProShares Ultra Consumer Services ETF ( UCC ), annual fees: 0.95%
  • ProShares Ultra DJ AIG Commodity ETF (NYSEArca:UCD), annual fees: 0.95%
  • ProShares Ultra Dow30 ETF (NYSEArca:DDM), annual fees: 0.95%
  • ProShares Ultra Euro ETF (NYSEArca:ULE), annual fees: 0.95%
  • ProShares Ultra Financials ETF ( UYG ), annual fees: 0.95%
  • ProShares Ultra Gold ETF (NYSEArca:UGL), annual fees: 0.95%
  • ProShares Ultra Health Care ETF ( RXL ), annual fees: 0.95%
  • ProShares Ultra Industrials ETF ( UXI ), annual fees: 0.95%
  • ProShares Ultra MidCap400 ETF ( MVV ), annual fees: 0.95%
  • ProShares Ultra Oil & Gas ETF ( DIG ), annual fees: 0.95%
  • ProShares Ultra QQQ ETF ( QLD ), annual fees: 0.95%
  • ProShares Ultra Real Estate ETF ( URE ), annual fees: 0.95%
  • ProShares Ultra Russell MidCap Growth ETF ( UKW ), annual fees: 0.95%
  • ProShares Ultra Russell MidCap Value ETF ( UVU ), annual fees: 0.95%
  • ProShares Ultra Russell1000 Growth ETF (NYSEArca:UKF), annual fees: 0.95%
  • ProShares Ultra Russell1000 Value ETF (NYSEArca:UVG), annual fees: 0.95%
  • ProShares Ultra Russell2000 ETF (NYSEArca:UWM), annual fees: 0.95%
  • ProShares Ultra Russell2000 Growth ETF (NYSEArca:UKK), annual fees: 0.95%
  • ProShares Ultra Russell2000 Value ETF ( UVT ), annual fees: 0.95%
  • ProShares Ultra S&P 500 ETF ( SSO ), annual fees: 0.95%
  • ProShares Ultra Semiconductors ETF ( USD ), annual fees: 0.95%
  • ProShares Ultra Silver ETF ( AGQ ), annual fees: 0.95%
  • ProShares Ultra SmallCap600 ETF ( SAA ), annual fees: 0.95%
  • ProShares Ultra Technology ETF ( ROM ), annual fees: 0.95%
  • ProShares Ultra Telecommunications ETF ( LTL ), annual fees: 0.95%
  • ProShares Ultra Utilities ETF ( UPW ), annual fees: 0.95%
  • ProShares Ultra Yen ETF (NYSEArca:YCL), annual fees: 0.95%
  • ProShares UltraShort Basic Materials ETF ( SMN ), annual fees: 0.95%
  • ProShares UltraShort Consumer Goods ETF ( SZK ), annual fees: 0.95%
  • ProShares UltraShort Consumer Services ETF (NYSEArca:SCC), annual fees: 0.95%
  • ProShares UltraShort DJ AIG Crude Oil ETF (NYSEArca:SCO), annual fees: 0.95%
  • ProShares UltraShort DJ30 ETF ( DXD ), annual fees: 0.95%
  • ProShares UltraShort Euro ETF (NYSEArca:EUO), annual fees: 0.95%
  • ProShares UltraShort Financials ETF ( SKF ), annual fees: 0.95%
  • ProShares UltraShort FTSE/Xinhua China 25 ETF ( FXP ), annual fees: 0.95%
  • ProShares UltraShort Gold ETF (NYSEArca:GLL), annual fees: 0.95%
  • ProShares UltraShort Health Care ETF ( RXD ), annual fees: 0.95%
  • ProShares UltraShort Industrials ETF ( SIJ ), annual fees: 0.95%
  • ProShares UltraShort Lehman 20 Year Treasury ETF ( TBT ), annual fees: 0.95%
  • ProShares UltraShort Lehman 7-10 Year Treasury ETF ( PST ), annual fees: 0.95%
  • ProShares UltraShort MidCap400 ETF (NYSEArca:MZZ), annual fees: 0.95%
  • ProShares UltraShort MSCI EAFE ETF ( EFU ), annual fees: 0.95%
  • ProShares UltraShort MSCI Emerging Markets ETF ( EEV ), annual fees: 0.95%
  • ProShares UltraShort MSCI Japan ETF ( EWV ), annual fees: 0.95%
  • ProShares UltraShort Oil & Gas ETF ( DUG ), annual fees: 0.95%
  • ProShares UltraShort QQQ ETF ( QID ), annual fees: 0.95%
  • ProShares UltraShort Real Estate ETF ( SRS ), annual fees: 0.95%
  • ProShares UltraShort Russell MidCap Growth ETF ( SDK ), annual fees: 0.95%
  • ProShares UltraShort Russell MidCap Value ETF (NYSEArca:SJL), annual fees: 0.95%
  • ProShares UltraShort Russell1000 Growth ETF ( SFK ), annual fees: 0.95%
  • ProShares UltraShort Russell1000 Value ETF ( SJF ), annual fees: 0.95%
  • ProShares UltraShort Russell2000 ETF (NYSEArca:TWM), annual fees: 0.95%
  • ProShares UltraShort Russell2000 Growth ETF (NYSEArca:SKK), annual fees: 0.95%
  • ProShares UltraShort Russell2000 Value ETF (NYSEArca:SJH), annual fees: 0.95%
  • ProShares UltraShort S&P 500 ETF (NYSEArca:SDS), annual fees: 0.95%
  • ProShares UltraShort Semiconductors ETF (NYSEArca:SSG), annual fees: 0.95%
  • ProShares UltraShort Silver ETF (NYSEArca:ZSL), annual fees: 0.95%
  • ProShares UltraShort SmallCap600 ETF (NYSEArca:SDD), annual fees: 0.95%
  • ProShares UltraShort Technology ETF (NYSEArca:REW), annual fees: 0.95%
  • ProShares UltraShort Telecommunications ETF (NYSEArca:TLL), annual fees: 0.95%
  • ProShares UltraShort Utilities ETF (NYSEArca:SDP), annual fees: 0.95%
  • ProShares UltraShort Yen ETF (NYSEArca:YCS), annual fees: 0.95%
  • Rydex 2x S&P 500 ETF (AMEX:RSU ), annual fees: 0.7%
  • Rydex Inverse 2x S&P 500 ETF (AMEX:RSW ), annual fees: 0.7%
  • Rydex 2x S&P MidCap 400 ETF (AMEX:RMM ), annual fees: 0.7%
  • Rydex Inverse 2x S&P MidCap 400 ETF (AMEX:RMS ), annual fees: 0.7%
  • Rydex 2x Russell 2000 ETF (AMEX:RRY ), annual fees: 0.7%
  • Rydex Inverse 2x Russell 2000 ETF (AMEX:RRZ ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Energy ETF (AMEX:REC ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Financial ETF (AMEX:RFN ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Technology ETF (AMEX:RTW ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Health Care ETF (AMEX:RHO ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Energy ETF (AMEX:REA ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Financial ETF (AMEX:RFL ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Technology ETF (AMEX:RTG ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Health Care ETF (AMEX:RHM ), annual fees: 0.7%

  • Direxion Energy Bear 3x Shares ETF (NYSEArca:ERY), annual fees: 0.95%
  • Direxion Energy Bull 3x Shares ETF (NYSEArca:ERX), annual fees: 0.94%
  • Direxion Financial Bear 3x Shares ETF (NYSEArca:FAZ), annual fees: 0.94%
  • Direxion Financial Bull 3x Shares ETF (NYSEArca:FAS), annual fees: 0.94%
  • Direxion Large Cap Bear 3x Shares ETF (NYSEArca:BGZ), annual fees: 0.95%
  • Direxion Large Cap Bull 3x Shares ETF (NYSEArca:BGU), annual fees: 0.95%
  • Direxion Mid Cap Bear 3x Shares ETF (NYSEArca:MWN), annual fees: 0.95%
  • Direxion Mid Cap Bull 3x Shares ETF (NYSEArca:MWJ), annual fees: 0.95%
  • Direxion Small Cap Bear 3x Shares ETF (NYSEArca:TZA), annual fees: 0.95%
  • Direxion Small Cap Bull 3x Shares ETF (NYSEArca:TNA), annual fees: 0.95%
  • ProShares Short Dow30 ETF (NYSEArca:DOG), annual fees: 0.95%
  • ProShares Short MidCap400 ETF (NYSEArca:MYY), annual fees: 0.95%
  • ProShares Short MSCI EAFE ETF ( EFZ ), annual fees: 0.95%
  • ProShares Short MSCI Emerging Markets ETF ( EUM ), annual fees: 0.95%
  • ProShares Short QQQ ETF ( PSQ ), annual fees: 0.95%
  • ProShares Short Russell2000 ETF (NYSEArca:RWM), annual fees: 0.95%
  • ProShares Short S&P 500 ETF ( SH ), annual fees: 0.95%
  • ProShares Short SmallCap600 ETF ( SBB ), annual fees: 0.95%
  • ProShares Ultra Basic Materials ETF ( UYM ), annual fees: 0.95%
  • ProShares Ultra Consumer Goods ETF ( UGE ), annual fees: 0.95%
  • ProShares Ultra Consumer Services ETF ( UCC ), annual fees: 0.95%
  • ProShares Ultra DJ AIG Commodity ETF (NYSEArca:UCD), annual fees: 0.95%
  • ProShares Ultra Dow30 ETF (NYSEArca:DDM), annual fees: 0.95%
  • ProShares Ultra Euro ETF (NYSEArca:ULE), annual fees: 0.95%
  • ProShares Ultra Financials ETF ( UYG ), annual fees: 0.95%
  • ProShares Ultra Gold ETF (NYSEArca:UGL), annual fees: 0.95%
  • ProShares Ultra Health Care ETF ( RXL ), annual fees: 0.95%
  • ProShares Ultra Industrials ETF ( UXI ), annual fees: 0.95%
  • ProShares Ultra MidCap400 ETF ( MVV ), annual fees: 0.95%
  • ProShares Ultra Oil & Gas ETF ( DIG ), annual fees: 0.95%
  • ProShares Ultra QQQ ETF ( QLD ), annual fees: 0.95%
  • ProShares Ultra Real Estate ETF ( URE ), annual fees: 0.95%
  • ProShares Ultra Russell MidCap Growth ETF ( UKW ), annual fees: 0.95%
  • ProShares Ultra Russell MidCap Value ETF ( UVU ), annual fees: 0.95%
  • ProShares Ultra Russell1000 Growth ETF (NYSEArca:UKF), annual fees: 0.95%
  • ProShares Ultra Russell1000 Value ETF (NYSEArca:UVG), annual fees: 0.95%
  • ProShares Ultra Russell2000 ETF (NYSEArca:UWM), annual fees: 0.95%
  • ProShares Ultra Russell2000 Growth ETF (NYSEArca:UKK), annual fees: 0.95%
  • ProShares Ultra Russell2000 Value ETF ( UVT ), annual fees: 0.95%
  • ProShares Ultra S&P 500 ETF ( SSO ), annual fees: 0.95%
  • ProShares Ultra Semiconductors ETF ( USD ), annual fees: 0.95%
  • ProShares Ultra Silver ETF ( AGQ ), annual fees: 0.95%
  • ProShares Ultra SmallCap600 ETF ( SAA ), annual fees: 0.95%
  • ProShares Ultra Technology ETF ( ROM ), annual fees: 0.95%
  • ProShares Ultra Telecommunications ETF ( LTL ), annual fees: 0.95%
  • ProShares Ultra Utilities ETF ( UPW ), annual fees: 0.95%
  • ProShares Ultra Yen ETF (NYSEArca:YCL), annual fees: 0.95%
  • ProShares UltraShort Basic Materials ETF ( SMN ), annual fees: 0.95%
  • ProShares UltraShort Consumer Goods ETF ( SZK ), annual fees: 0.95%
  • ProShares UltraShort Consumer Services ETF (NYSEArca:SCC), annual fees: 0.95%
  • ProShares UltraShort DJ AIG Crude Oil ETF (NYSEArca:SCO), annual fees: 0.95%
  • ProShares UltraShort DJ30 ETF ( DXD ), annual fees: 0.95%
  • ProShares UltraShort Euro ETF (NYSEArca:EUO), annual fees: 0.95%
  • ProShares UltraShort Financials ETF ( SKF ), annual fees: 0.95%
  • ProShares UltraShort FTSE/Xinhua China 25 ETF ( FXP ), annual fees: 0.95%
  • ProShares UltraShort Gold ETF (NYSEArca:GLL), annual fees: 0.95%
  • ProShares UltraShort Health Care ETF ( RXD ), annual fees: 0.95%
  • ProShares UltraShort Industrials ETF ( SIJ ), annual fees: 0.95%
  • ProShares UltraShort Lehman 20 Year Treasury ETF ( TBT ), annual fees: 0.95%
  • ProShares UltraShort Lehman 7-10 Year Treasury ETF ( PST ), annual fees: 0.95%
  • ProShares UltraShort MidCap400 ETF (NYSEArca:MZZ), annual fees: 0.95%
  • ProShares UltraShort MSCI EAFE ETF ( EFU ), annual fees: 0.95%
  • ProShares UltraShort MSCI Emerging Markets ETF ( EEV ), annual fees: 0.95%
  • ProShares UltraShort MSCI Japan ETF ( EWV ), annual fees: 0.95%
  • ProShares UltraShort Oil & Gas ETF ( DUG ), annual fees: 0.95%
  • ProShares UltraShort QQQ ETF ( QID ), annual fees: 0.95%
  • ProShares UltraShort Real Estate ETF ( SRS ), annual fees: 0.95%
  • ProShares UltraShort Russell MidCap Growth ETF ( SDK ), annual fees: 0.95%
  • ProShares UltraShort Russell MidCap Value ETF (NYSEArca:SJL), annual fees: 0.95%
  • ProShares UltraShort Russell1000 Growth ETF ( SFK ), annual fees: 0.95%
  • ProShares UltraShort Russell1000 Value ETF ( SJF ), annual fees: 0.95%
  • ProShares UltraShort Russell2000 ETF (NYSEArca:TWM), annual fees: 0.95%
  • ProShares UltraShort Russell2000 Growth ETF (NYSEArca:SKK), annual fees: 0.95%
  • ProShares UltraShort Russell2000 Value ETF (NYSEArca:SJH), annual fees: 0.95%
  • ProShares UltraShort S&P 500 ETF (NYSEArca:SDS), annual fees: 0.95%
  • ProShares UltraShort Semiconductors ETF (NYSEArca:SSG), annual fees: 0.95%
  • ProShares UltraShort Silver ETF (NYSEArca:ZSL), annual fees: 0.95%
  • ProShares UltraShort SmallCap600 ETF (NYSEArca:SDD), annual fees: 0.95%
  • ProShares UltraShort Technology ETF (NYSEArca:REW), annual fees: 0.95%
  • ProShares UltraShort Telecommunications ETF (NYSEArca:TLL), annual fees: 0.95%
  • ProShares UltraShort Utilities ETF (NYSEArca:SDP), annual fees: 0.95%
  • ProShares UltraShort Yen ETF (NYSEArca:YCS), annual fees: 0.95%
  • Rydex 2x S&P 500 ETF (AMEX:RSU ), annual fees: 0.7%
  • Rydex Inverse 2x S&P 500 ETF (AMEX:RSW ), annual fees: 0.7%
  • Rydex 2x S&P MidCap 400 ETF (AMEX:RMM ), annual fees: 0.7%
  • Rydex Inverse 2x S&P MidCap 400 ETF (AMEX:RMS ), annual fees: 0.7%
  • Rydex 2x Russell 2000 ETF (AMEX:RRY ), annual fees: 0.7%
  • Rydex Inverse 2x Russell 2000 ETF (AMEX:RRZ ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Energy ETF (AMEX:REC ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Financial ETF (AMEX:RFN ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Technology ETF (AMEX:RTW ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Health Care ETF (AMEX:RHO ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Energy ETF (AMEX:REA ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Financial ETF (AMEX:RFL ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Technology ETF (AMEX:RTG ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Health Care ETF (AMEX:RHM ), annual fees: 0.7%
  • Direxion Energy Bear 3x Shares ETF (NYSEArca:ERY), annual fees: 0.95%
  • Direxion Energy Bull 3x Shares ETF (NYSEArca:ERX), annual fees: 0.94%
  • Direxion Financial Bear 3x Shares ETF (NYSEArca:FAZ), annual fees: 0.94%
  • Direxion Financial Bull 3x Shares ETF (NYSEArca:FAS), annual fees: 0.94%
  • Direxion Large Cap Bear 3x Shares ETF (NYSEArca:BGZ), annual fees: 0.95%
  • Direxion Large Cap Bull 3x Shares ETF (NYSEArca:BGU), annual fees: 0.95%
  • Direxion Mid Cap Bear 3x Shares ETF (NYSEArca:MWN), annual fees: 0.95%
  • Direxion Mid Cap Bull 3x Shares ETF (NYSEArca:MWJ), annual fees: 0.95%
  • Direxion Small Cap Bear 3x Shares ETF (NYSEArca:TZA), annual fees: 0.95%
  • Direxion Small Cap Bull 3x Shares ETF (NYSEArca:TNA), annual fees: 0.95%
  • ProShares Short Dow30 ETF (NYSEArca:DOG), annual fees: 0.95%
  • ProShares Short MidCap400 ETF (NYSEArca:MYY), annual fees: 0.95%
  • ProShares Short MSCI EAFE ETF ( EFZ ), annual fees: 0.95%
  • ProShares Short MSCI Emerging Markets ETF ( EUM ), annual fees: 0.95%
  • ProShares Short QQQ ETF ( PSQ ), annual fees: 0.95%
  • ProShares Short Russell2000 ETF (NYSEArca:RWM), annual fees: 0.95%
  • ProShares Short S&P 500 ETF ( SH ), annual fees: 0.95%
  • ProShares Short SmallCap600 ETF ( SBB ), annual fees: 0.95%
  • ProShares Ultra Basic Materials ETF ( UYM ), annual fees: 0.95%
  • ProShares Ultra Consumer Goods ETF ( UGE ), annual fees: 0.95%
  • ProShares Ultra Consumer Services ETF ( UCC ), annual fees: 0.95%
  • ProShares Ultra DJ AIG Commodity ETF (NYSEArca:UCD), annual fees: 0.95%
  • ProShares Ultra Dow30 ETF (NYSEArca:DDM), annual fees: 0.95%
  • ProShares Ultra Euro ETF (NYSEArca:ULE), annual fees: 0.95%
  • ProShares Ultra Financials ETF ( UYG ), annual fees: 0.95%
  • ProShares Ultra Gold ETF (NYSEArca:UGL), annual fees: 0.95%
  • ProShares Ultra Health Care ETF ( RXL ), annual fees: 0.95%
  • ProShares Ultra Industrials ETF ( UXI ), annual fees: 0.95%
  • ProShares Ultra MidCap400 ETF ( MVV ), annual fees: 0.95%
  • ProShares Ultra Oil & Gas ETF ( DIG ), annual fees: 0.95%
  • ProShares Ultra QQQ ETF ( QLD ), annual fees: 0.95%
  • ProShares Ultra Real Estate ETF ( URE ), annual fees: 0.95%
  • ProShares Ultra Russell MidCap Growth ETF ( UKW ), annual fees: 0.95%
  • ProShares Ultra Russell MidCap Value ETF ( UVU ), annual fees: 0.95%
  • ProShares Ultra Russell1000 Growth ETF (NYSEArca:UKF), annual fees: 0.95%
  • ProShares Ultra Russell1000 Value ETF (NYSEArca:UVG), annual fees: 0.95%
  • ProShares Ultra Russell2000 ETF (NYSEArca:UWM), annual fees: 0.95%
  • ProShares Ultra Russell2000 Growth ETF (NYSEArca:UKK), annual fees: 0.95%
  • ProShares Ultra Russell2000 Value ETF ( UVT ), annual fees: 0.95%
  • ProShares Ultra S&P 500 ETF ( SSO ), annual fees: 0.95%
  • ProShares Ultra Semiconductors ETF ( USD ), annual fees: 0.95%
  • ProShares Ultra Silver ETF ( AGQ ), annual fees: 0.95%
  • ProShares Ultra SmallCap600 ETF ( SAA ), annual fees: 0.95%
  • ProShares Ultra Technology ETF ( ROM ), annual fees: 0.95%
  • ProShares Ultra Telecommunications ETF ( LTL ), annual fees: 0.95%
  • ProShares Ultra Utilities ETF ( UPW ), annual fees: 0.95%
  • ProShares Ultra Yen ETF (NYSEArca:YCL), annual fees: 0.95%
  • ProShares UltraShort Basic Materials ETF ( SMN ), annual fees: 0.95%
  • ProShares UltraShort Consumer Goods ETF ( SZK ), annual fees: 0.95%
  • ProShares UltraShort Consumer Services ETF (NYSEArca:SCC), annual fees: 0.95%
  • ProShares UltraShort DJ AIG Crude Oil ETF (NYSEArca:SCO), annual fees: 0.95%
  • ProShares UltraShort DJ30 ETF ( DXD ), annual fees: 0.95%
  • ProShares UltraShort Euro ETF (NYSEArca:EUO), annual fees: 0.95%
  • ProShares UltraShort Financials ETF ( SKF ), annual fees: 0.95%
  • ProShares UltraShort FTSE/Xinhua China 25 ETF ( FXP ), annual fees: 0.95%
  • ProShares UltraShort Gold ETF (NYSEArca:GLL), annual fees: 0.95%
  • ProShares UltraShort Health Care ETF ( RXD ), annual fees: 0.95%
  • ProShares UltraShort Industrials ETF ( SIJ ), annual fees: 0.95%
  • ProShares UltraShort Lehman 20 Year Treasury ETF ( TBT ), annual fees: 0.95%
  • ProShares UltraShort Lehman 7-10 Year Treasury ETF ( PST ), annual fees: 0.95%
  • ProShares UltraShort MidCap400 ETF (NYSEArca:MZZ), annual fees: 0.95%
  • ProShares UltraShort MSCI EAFE ETF ( EFU ), annual fees: 0.95%
  • ProShares UltraShort MSCI Emerging Markets ETF ( EEV ), annual fees: 0.95%
  • ProShares UltraShort MSCI Japan ETF ( EWV ), annual fees: 0.95%
  • ProShares UltraShort Oil & Gas ETF ( DUG ), annual fees: 0.95%
  • ProShares UltraShort QQQ ETF ( QID ), annual fees: 0.95%
  • ProShares UltraShort Real Estate ETF ( SRS ), annual fees: 0.95%
  • ProShares UltraShort Russell MidCap Growth ETF ( SDK ), annual fees: 0.95%
  • ProShares UltraShort Russell MidCap Value ETF (NYSEArca:SJL), annual fees: 0.95%
  • ProShares UltraShort Russell1000 Growth ETF ( SFK ), annual fees: 0.95%
  • ProShares UltraShort Russell1000 Value ETF ( SJF ), annual fees: 0.95%
  • ProShares UltraShort Russell2000 ETF (NYSEArca:TWM), annual fees: 0.95%
  • ProShares UltraShort Russell2000 Growth ETF (NYSEArca:SKK), annual fees: 0.95%
  • ProShares UltraShort Russell2000 Value ETF (NYSEArca:SJH), annual fees: 0.95%
  • ProShares UltraShort S&P 500 ETF (NYSEArca:SDS), annual fees: 0.95%
  • ProShares UltraShort Semiconductors ETF (NYSEArca:SSG), annual fees: 0.95%
  • ProShares UltraShort Silver ETF (NYSEArca:ZSL), annual fees: 0.95%
  • ProShares UltraShort SmallCap600 ETF (NYSEArca:SDD), annual fees: 0.95%
  • ProShares UltraShort Technology ETF (NYSEArca:REW), annual fees: 0.95%
  • ProShares UltraShort Telecommunications ETF (NYSEArca:TLL), annual fees: 0.95%
  • ProShares UltraShort Utilities ETF (NYSEArca:SDP), annual fees: 0.95%
  • ProShares UltraShort Yen ETF (NYSEArca:YCS), annual fees: 0.95%
  • Rydex 2x S&P 500 ETF (AMEX:RSU ), annual fees: 0.7%
  • Rydex Inverse 2x S&P 500 ETF (AMEX:RSW ), annual fees: 0.7%
  • Rydex 2x S&P MidCap 400 ETF (AMEX:RMM ), annual fees: 0.7%
  • Rydex Inverse 2x S&P MidCap 400 ETF (AMEX:RMS ), annual fees: 0.7%
  • Rydex 2x Russell 2000 ETF (AMEX:RRY ), annual fees: 0.7%
  • Rydex Inverse 2x Russell 2000 ETF (AMEX:RRZ ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Energy ETF (AMEX:REC ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Financial ETF (AMEX:RFN ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Technology ETF (AMEX:RTW ), annual fees: 0.7%
  • Rydex Inverse 2x S&P Select Sector Health Care ETF (AMEX:RHO ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Energy ETF (AMEX:REA ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Financial ETF (AMEX:RFL ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Technology ETF (AMEX:RTG ), annual fees: 0.7%
  • Rydex 2x S&P Select Sector Health Care ETF (AMEX:RHM ), annual fees: 0.7%
  • Co-founder of indexfunds.com, author of two books on investing, and founder of ETFzone.com, Will has been writing on indexing issues for 8 years. He holds an MBA from the University of Texas at Austin.

    Co-founder of indexfunds.com, author of two books on investing, and founder of ETFzone.com, Will has been writing on indexing issues for 8 years. He holds an MBA from the University of Texas at Austin.



    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



    This article appears in: Investing , ETFs


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