Tag Archives: Margin Trading

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Leveraged ETF Tracking Error

Author: Leo Chen, Ph.D., Post Date: December 14, 2018
Cumberland Advisors Market Commentary - Leo Chen, Ph.D.

We discussed the goal of leveraged ETFs previously – to provide daily returns that match the desired ratio over the underlying index (https://www.cumber.com/margin-trading-vs-leveraged-etfs/). These ETFs rebalance daily to maintain the proportional leverage through derivatives such as futures, forwards, and swaps. We will demonstrate that this daily rebalancing feature dictates the long-term returns of leveraged ETFs, […]

Margin Trading vs. Leveraged ETFs

Author: Leo Chen, Ph.D., Post Date: November 27, 2018
Market Commentary - Cumberland Advisors - Margin Trading vs. Leveraged ETFs

Our previous commentary on leveraged ETFs (www.cumber.com/leveraged-etfs/) received many comments from our readers. We would like to thank you for sharing your thoughts and address one common question among many investors: Which is better, margin trading or leveraged ETFs? First, what is the difference between these two methods of investing? We walked through leveraged ETFs […]