Anyone who has invested successfully in these ultrashort ETFs knows by now that the 2x hedge is a goal and that it is rarely achieved.
I do know that there are structured products used to to get to the 2x goal - obviously - as without them, the goal could not possibly be reached.
These are not transparent products as there is no telling what they hold in order to attempt to reach the 2x goal. This should be enough to make most investors wary.
But they do well in volatility.
I do expect [t]SKF[/t] to go up substantially in the next few months simply because the prospect for financials sucks so much.
These are volatile, dangerous products for most people. They must be watched carefully, which I do. If you want more security, buy twice the amount in a regular short fund. vbg.
I am very open minded about them, e.g., I did very well with FXP, got a 30+% return in just two or three weeks and decided not to tempt fate so I sold. But I am looking to get back in.
Most investors' risk profiles do not allow for things such as SKF, but not me. My views are simplistic in the extreme, but they are well researched. In the case of SKF, I've concluded that financials are going to be hammered throughout the year, that writedowns are not nearly complete, that the prevalence of CDS in banks will inevitably hurt them as defaults on debt increase, etc., all of which bodes well for SKF. |
