Short Sector ETFs: Hell to the No
Posted December 24th, 2008 by theStockMasters...
Unless you are playing daily swings, the short sector ETFs are victims of volatilty and aren't working for investors who don't have the time, money or risk to day trade. Be like Whitney and say -- Ah Hell to the No.
Great article on theStreet.com by Eric Oberg - Given that the double-levered long-side ProShares Ultra Real Estate ETF (URE) was down nearly 80%, one would expect its complement (the ProShares UltraShort Real Estate ETF (SRS)) to be up 80% instead of losing nearly half of its value, given they are based on the exact same index, right?
The same goes with the financial sector ETFs. Given that the
double-levered, long-sided ProShares Ultra Financial ETF (UYG) was down
nearly 85%, you'd expect its complement (the ProShares UltraShort Financial (SKF)) to be up 85% rather than flat. As the car rental commercial says, "Not exactly..."
The short sector ETFs are causing more pain than gain for all of us, enjoy the article, its worth your time:
Click to Read at theStreet.com
How Short ETFs Can Work Against You
| ETF |
Jan 2, 2008 close
|
Dec 17, 2008 close
|
YTD Return
|
| URE (2x long RE) |
33.15
|
6.70
|
-79.8%
|
| SRS (2x short RE) |
110.42
|
57.19
|
-48.2%
|
| DJ US RE index |
605.69
|
368
|
-39.2%
|
| UYG (2x long Fin) |
39.22
|
6.09
|
-84.5%
|
| SKF (2x short Fin) |
104.00
|
105.47
|
+1.4%
|
| DJ US Fin index |
683.8
|
346.9
|
-49.3%
|
SOURCE: http://www.thestreet.com/story/10454678/1/why-short-sector-etfs-arent-so...
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