Pass on this ETF

Article Excerpt

HORIZONS BETAPRO S&P 500 2X DAILY BEAR ETF $14.00 (Toronto symbol HSD; TSINetwork ETF Rating: Aggressive; Market cap: $48.6 million) aims to offer two times the opposite of the daily performance of the S&P 500 Index. The fund’s MER is a high 1.15% For example, when the S&P 500 index increases by 1% on a particular day, the ETF will decline by 2%. In turn. if the S&P 500 index declines by 1% on any day, the fund will gain 2%. To achieve this the ETF uses leverage and derivative instruments. The ETF started up in June 2008. This provides a long track record to assess its performance. As expected, the fund saw spectacular gains of 128% during the general market decline in 2008 and 2009. Specifically, that’s from, from its launch date to March 2009. However, since that time the ETF has lost 98% of its value and trades well below its launch price. The main reason for the dismal performance is the fact that the…

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