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April 01, 2010 at 04:00 AM
ProFunds Group has just introduced several new ProShares ETFs that employ high octane leverage. The funds will utilize triple daily long and short (inverse) strategies on the NASDAQ-100, Dow Jones Industrial Average, S&P MidCap 400 and Russell 2000.
Since mid-2009 the company has managed the UltraPro S&P 500 (UPRO) and the UltraPro Short S&P 500 (SPXU) which attempt to triple the daily long and short performance on the S&P 500.
Even with this latest launch, the ProShares lineup still mostly consists of long and short ETFs that use two times daily leverage. DirexionShares, a Boston-based investment manager, oversees $4.8 billion in long and short daily triple leveraged ETFs.
Leverage refers to an investment strategy that attempts to achieve magnified gains. For example, if the NASDAQ-100 falls by one percent on a given day, a triple inverse focused ETF like SQQQ should rise by three percent. Conversely, if the NASDAQ-100 rises by one percent, SQQQ should fall by three percent.
