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Strategies & Market Trends : Dividend investing for retirement

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To: JimisJim who wrote (20162)	6/29/2014 4:58:26 AM
From: Elroy	Read Replies (1) of 34328

Did a bit of reading on CEFL, I think it's a bit different than the black hole leveraged ETFs that you're thinking of. etracs.ubs.com/product/detail/index/ussymbol/CEFL For one, it sets leverage monthly, not daily. For two, I can't find this on the site, but someone posted on Yahoo that the leverage is created as I wrote, by UBS borrowing at Libor rates and just buying 2x the capital held in the ETN. These leveraged ETNs don't hold the underlying assets, they just hold an index that reflects the underlying assets. There doesn't seem to be any reason that leveraged deployed that way would cause a black hole, and in fact it's a fantastic way for individual investors to get leverage as long as short term rates are as ridiculously lowas they are now. The leverage is close to free.

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