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Leveraged ETFs for Longer-Term Investors

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  • (1:00) - What Is Volatility Drag and What Impact Does It Have On Leveraged ETFs?
  • (5:50) - How Long Do Investors Hold These Leverage ETF Products?
  • (8:30) - Why Did It Take So Long For These Products To Make It To Market?
  • (11:20) - Tradr ETFs Calander Reset Leveraged ETF Suite
  • (17:45) - What Type of Investor Are These Trading Tools Meant For?
  • (23:25) - What Other Products Can Investors Expect From Tradr ETFs In The Future?
  • (27:20) - What Impact Do Leveraged ETFs Have On Market Volatility?
  • (31:45) - Episode Roundup: Podcast@Zacks.com

 

In this episode of ETF Spotlight, I speak with Matt Markiewicz, Head of Product & Capital Markets at Tradr ETFs, about Calendar Reset Leveraged ETFs. These ETFs are designed for slightly longer-term investors, unlike traditional leveraged ETFs, which reset daily.

Since their introduction in 2006, leveraged ETFs—known for magnifying both potential gains and losses—have seen immense growth. There are now over 200 products in the market, with some being incredibly popular. For example, assets in the 3x Nasdaq ProShares UltraPro QQQ (TQQQ - Free Report) have ballooned to $23 billion.

More recently, leveraged ETFs on popular individual stocks like NVIDIA (NVDA - Free Report) , Tesla (TSLA - Free Report) , and MicroStrategy (MSTR - Free Report) have also gained traction.

These ETFs aim to achieve their stated performance goal on a daily basis, but their performance can diverge significantly from their stated objectives if held for longer periods.

Compounding can have both favorable and adverse effects on returns, and these products perform best in trending markets with low volatility. When the underlying security is volatile, the risks of underperformance increase.

The Tradr suite of calendar reset funds includes options that provide leveraged exposure to the performance of SPDR S&P 500 ETF (SPY - Free Report) , Invesco QQQ (QQQ - Free Report) , and iShares Semiconductor ETF (SOXX - Free Report) , as well as individual stocks like NVIDIA and Tesla.

Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.

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