Furthermore, your gains are capped the stock can only go down to 0 , but your downside is unlimited it could go to the moon. Because gains compound more than losses, an inverse ETF is not a good long term investment and should only be used for short term predictions. In the near term, ETFs that short the market will return about the opposite of the market. But over time, because of the compounding of daily returns, a disconnect may occur.
For this reason, you should only purchase inverse ETFs if you believe the stock market will drop significantly and very soon. Passed these two qualifications?
The higher the leverage the more the risk so pay attention to whether an ETF is leveraged or not… and how much. Likewise, some people like to invest with established issuers while others want to place their bets on up and running funds.
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The information on this site does not modify any insurance policy terms in any way. Inverse exchange-traded funds ETFs are often used by contrarian traders looking to profit from the decline in value of an asset class, such as an index. These risky investments, often in the form of inverse short ETFs, can be valuable for seasoned market pros. But while these investments can be potentially lucrative, they are definitely not for everyone. An inverse ETF is set up so that its price rises or falls when the price of its target asset falls or rises.
The overall rating for an ETF is based on a weighted average of the time-period ratings e. The determination of an ETF's rating does not affect the retail open-end mutual fund data published by Morningstar. Past performance is no guarantee of future results. SEC Day Yield is a standard yield calculation developed by the Securities and Exchange Commission that allows investors to more fairly compare funds.
The figure is calculated by dividing the net investment income less expenses by the current maximum offering price. Current yield is equal to a bond's annual interest payment divided by its current market price. The current yield only refers to the yield of the bond at the current moment, not the total return over the life of the bond. Dividend yield shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock.
Effective duration is a measure of a fund's sensitivity to interest rate changes, reflecting the likely change in bond prices given a small change in yields. Higher duration generally means greater sensitivity.
Effective duration for this fund is calculated including both the long bond positions and the short Treasury futures positions. Distribution Yield represents the annualized yield based on the last income distribution. Trailing price to earnings ratio measures market value of a fund or index relative to the collective earnings of its component stocks for the most recent month period.
Price to book ratio measures market value of a fund or index relative to the collective book values of its component stocks. Weighted average market cap is the average market value of a fund or index, weighted for the market capitalization price times shares outstanding of each component.
In such a weighting scheme, larger market cap companies carry greater weight than smaller market cap companies. Sometimes distributions are re-characterized for tax purposes after they've been declared.
An ROC is a distribution to investors that returns some or all of their capital investment, thus reducing the value of their investment. In an efficient market, the investment's price will fall by an amount approximately equal to the ROC. In general, investors are not taxed on an ROC unless it begins to exceed their original investment value. This is the dollar amount of your initial investment in the fund.
This is the percentage change in the index or benchmark since your initial investment. Enter a positive or negative number. This is the dollar value that your account should be after you rebalance. This is the dollar amount you have invested in your fund. Credit default swap CDS spread reflects the annualized amount espressed in basis points that a CDS protection buyer will pay to a protection seller.
The weighted average CDS spread in a portfolio is the sum of CDS spreads of each contract in the portfolio multiplied by their relative weights. Spread duration is a measure of a fund's approximate mark-to-market price sensitivity to small changes in CDS spreads. Higher spread duration reflects greater sensitivity.
Shareholder Supplemental Tax Information. It is a float-adjusted, market capitalization-weighted index of U. Infrastructure refers to companies that actually own and operate the transportation, communications, energy and water assets that provide essential services to our society.
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