Investment: 13,000 instead of 1900 percent return – Are leveraged ETFs better than their reputation?
Experts warn against leveraged investments that promise to double price developments. However, all products have been in the plus since their launch, according to an evaluation by Handelsblatt.
Düsseldorf – Consumer advocates and investment professionals have consistently warned against leveraged ETFs, which are designed to double the daily movement of the stock market. Critics argue that these exchange-traded funds are too complex for individual investors and expose them to disproportionately high risks of losses. Despite their appealing returns, leveraged ETFs often appear more attractive in comparison.
According to the comparison platform JustETF, German investors currently have a choice of ten leveraged stock ETFs, all of which have outperformed their unleveraged counterparts since their inception. The stark contrast is especially evident with the twice leveraged ETF from provider Amundi tracking the US technology index Nasdaq 100.
Since its launch in 2006, this ETF has increased by 13,000 percent, according to Bloomberg financial data. In the same period, a traditional Nasdaq ETF rose by around 2,000 percent. The question remains: are leveraged ETFs truly better than their reputation suggests?
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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