What You Should Know:
- FactorShares is the fund provider.
- FSE has an expense ratio of 0.75%.
- The fund is down 22.92% over the past month and down 50.17% over the last three months.
- The FSE ETF rebalances daily, so the fund will only achieve its target 2X spread return on a day-to-day basis.
- Since the fund has a 2X long and a 2X short exposure, FSE has a gross leverage ratio of 4:1.
- “On extremely volatile days, the fund’s gearing may change a lot, and investors who didn’t buy immediately after the day’s rebalancing may not earn the spread,” according to Morningstar analyst Samuel Lee.
- “Investors in this fund are expressing views in two asset classes,” Lee added. “Both must be correct in order for the trade to be profitable.”
The Latest News:
- U.S. stocks are on their biggest three-day rally in six weeks Tuesday on renewed hopes that Europe will ease its debt crisis, reports Rila Nazareth for Bloomberg.
- “The chorus is getting louder that Europe needs to do something,” James Dunigan, chief investment officer for PNC Wealth Management, commented. “If we step away from the edge and avoid a recession, then there’s no doubt there’s value there.”
- U.S. Treasury prices fell Tuesday as benchmark 10-year note yields inched up neared 2% on speculation of another Eurozone rescue package and diminishing demand for safe-haven assets, reports Karen Brettell for Reuters.
For past stories in this series, visit our ETF Spotlight category.
FactorShares 2X S&P500 Bull/TBond Bear
Max Chen contributed to this article.