Can I lose more than my initial investment while investing in an ETF a tracking Short/ Leveraged equity indices?
No, for example if you were to buy $100 worth of an ETF tracking a Short or Leveraged index there is a possibility that over a period of time the amount invested could fall to zero if the index the ETF is tracking moves against you. However, the investor can never lose more than that original investment. 2. The return from the ETF tracking the leveraged/short index is different from 2x or -2x the long index return over the last week or month? Why doesn’t the short/leveraged index track the exact movement of the long index? The ETFs track a leveraged/short index which is designed to provide 2x or -2x the daily % change in the reference index (for example, the FTSE 100 Leveraged Index is designed to provide twice the daily percentage change in the level of the FTSE 100 Index) before fees and expenses. However, the return may not equal 2 or -2 times the change in the Index over periods longer than one day. This is due to the daily rebalancing of the leveraged/short index and also the fact
