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Short, Leveraged ETFs Rule

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A quick glance at the best year-to date performing ETFs reveals a not so subtle message. Short ETFs rule.

The 38 best-performing ETFs are all short ETFs, followed by a few currency ETFs and bond ETFs (mainly Treasuries).

Furthermore, the past three months have been a traders market. As a matter of fact, the regularity of 3-plus percent swings up or down has created a traders paradise. More than one out of three securities traded on the stock exchanges are ETFs.

ETF providers took a good look at recent market conditions and issued a bundle of new leveraged short and long ETFs. ProShares launched eight new ETFs, with double exposure in both directions, linked to the Dow Jones AIG Commodity Index, Dow Jones AIG Crude Oil Index, the euro and the yen

Direxion, a new comer to the ETF market place opened a new chapter for ETFs and launched a set of eight ETFs with triple leverage. The new Direxion ETFs move either 300 percent in the same or opposite direction of the underlying index. Triple exposure is available linked to U.S. large caps, U.S. small caps, energy and financials.

With trading volume already in the millions, it is safe to say that the new Direxion triple-leveraged ETFs have been well received. It shouldn’t be long before they top the list of best and worst ETF performers.

New ETFs were also launched by iShares, Rydex, Northern Trust, RevenueShares and PowerShares.

With 34 new ETFs hitting the market place, November was the best month (in terms of new launches) since June.

Ron DeLegge is the San Diego-based editor of


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