@article {Mackintosh25, author = {Phil Mackintosh}, title = {Double Trouble}, volume = {2008}, number = {1}, pages = {25--31}, year = {2008}, publisher = {Institutional Investor Journals Umbrella}, abstract = {As the market headed toward record levels in 2007, a new breed of ETF{\textquoteright}s-giving leveraged exposure-was proving a popular. Then, as the market started to fall during late 2007, and again in 2008, positions in these double long and short ETF{\textquoteright}s grew to over $16bn-proving that, despite the volatility, leverage remained hugely popular with investors. Now, there are over 70 of these leveraged ETF{\textquoteright}s-covering different regions, sectors, asset classes and even more (3x) leverage. By understanding how the underlying leveraged indexes are calculated, and simulating the returns of these ETF{\textquoteright}s, we show that expected performance is quite different from 2x the market-as many investors have now started to notice! Despite high management fees these ETF{\textquoteright}s do offer cheap access to institutional stock and cash borrow rates. However given that markets rarely trend in one direction for long, our analysis shows that these ETF{\textquoteright}s are likely to be better for short term traders, than longer term investors.}, URL = {https://guides.pm-research.com/content/2008/1/25}, eprint = {https://guides.pm-research.com/content/2008/1/25.full.pdf}, journal = {ETFs and Indexing} }