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Ultra ETF
Ultra Exchange Traded Funds are funds that employ leverage in order to achieve double returns of a benchmark. For each 1% that index moves, Ultra ETF will move 2%.
Ultra ETF can correlate with broad range of benchmarks, from S&P 500 to specific industrial sectors. In addition, Ultra ETFs can not achieve double returns on flat markets and sometimes may produce lower returns than expected in long runs. They are intended to give best returns when engaged in short-term investing strategies.
As you see, Ultra ETF can achieve double returns, but it also can experience double losses due to market volatility. When underlying benchmark falls 1%, Ultra ETF will fall 2%. That is the greatest danger of an Ultra Exchange Trading Fund.
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