Leveraged and Short Telecom ETFs Can Maximize Exposure On Both Sides

March 27, 2008 at 1:00 pm by Tom Lydon

Phone Year-to-date, the iShares Dow Jones US Telecom (IYZ) and the iShares S&P Global Telecommunications (IXP) exchange traded funds (ETFs) are down 20.8% and 13.7%, respectively. So, it’s probably a good time for the new ProShares UltraShort Telecommunications (TLL).

Launched alongside the ultrashort is the ProShares Ultra Telecommunications (LTL), designed to deliver twice the performance of the index. In other words, when the index rises by 1%, the ETF would rise by 2%. Keep in mind, this holds true for the flip side of the equation.

The telecommunications sector is dynamic and volatile at times, but rapidly changing technologies, and the quick spread of wireless communication, along with consumer and internet entertainment, are attracting investment in this sector.

The new ETFs are listed, but trading has not started, according to Trading Markets.

Short and leveraged ETFs can be used in a variety of ways, including:

  • Continuing to profit, even in a sector downturn
  • To get more bang for your investment buck
  • To execute sector rotation strategies
  • To easily adjust overall portfolio exposure

As with anything else, caution should be exercised with these types of funds. This magnified potential for gains can just as easily turn and magnify your potential for loss.

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2 Comments For This Post

  1. Hal Lueking Says:

    Are not both ETFs from ProShares?

  2. Tom Lydon Says:

    Thank you, Hal! It’s been fixed.

Leave a Reply

    • Tom Lydon: Thanks, Donato. We reread what we wrote, and realize that it was misleading and didn’t represent...
    • Tom Lydon: Hi Harry, The fund has not launched yet. We’ll let you know when it does. RVEI is the ticker symbol...
    • HARRY FOREMAN: I’M CONFUSED: WHAT IS THE SYMBOL? RICI RJI RVEI HAS NOT THE NEW FUND(RVEI) BEEN STARTED YET?
    • Tom Lydon: Hi Ted and Sheia, There is the PowerShares Financial Preferred (PGF), iShares S&P U.S. Preferred...
    • Tom Lydon: Thank you Paul for pointing this out. I apologize, it should be that ITA is down 15.5% year-to-date, not...

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