Leveraged Stocks: Risky Investments

This is a news story, published by CNBC, that relates primarily to ETF news.

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leveraged ETFs

CNBC

•

Business

Business & Economics

The market's riskiest way to trade on the biggest tech stocks is not well understood by investors

Summary

Nutrition label

68% Informative

In 2016 , leveraged and inverse ETFs were 2% of the ETF market.

Now, they represent almost 8% of ETF assets.

They are often among the most traded ETFs, placing in the top 20 in daily trading dollar volume.

The longer a leveraged or inverse ETF is held, the bigger the divide between the underlying stock and the ETF .

High fees are another sign these ETFs are not designed for the long-term buy-and-hold investor.

The Direxion Daily TSLA Bull 2X Shares has an expense ratio of 0.96% compared to the Invesco QQQ Trust's expense ratio at 0.2% , and the Fidelity MSCI Information Technology Index .

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formal

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English

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not hateful