Discussing financial markets leverage also means a conversation about leveraged exchange traded funds, an exciting but risky corner of the broader ETF universe.
These products are best suited for active, risk-tolerant traders, something that both ProShares and Direxion, the two largest issuers of leveraged of inverse and leveraged ETFs, do a good job of explaining to investors on their web sites.
That is another way of bring up the familiar reminder that leveraged ETFs are not buy and hold instruments. That is the case in any given year and 2014 as been no exception.
As the following list of the 2014’s 10 worst leveraged ETFs shows, holding the wrong leveraged funds for extended time frames can be hazardous to a portfolio’s health. All performances are as of Dec. 4. Let’s get started with the…