Daily MultiPeriod Performance of Leveraged ETFs

We look today at the average multiperiod daily performance of a couple of pairs of leveraged ETFs. The study was based on the daily closing prices of:

- FAS and FAZ, since inception on November 19 2008
- HGU.to and HGD.to since Jan. 2 2008.

We looked at the performance of holding these funds for 1 day, 2 days, 3 days, and so on all the way to 180 days, and also compare with XLF as well as the XGD.to.

FAS, FAZ:

(please click on images to enlarge)

On average, FAZ always lost money, even after holding for only 1 day. FAS does slightly little better, with a very minor gain after holding for up to 5 days. It is interesting to remember that one of these funds is a bear and the other one a bull. In comparison, XLF does much better than both of them, showing average gains up to 15 days.

HGU.to, HGD.to:

Similarly, on average HGD always lost money since Jan 2 2008, even after holding for only 1 day. HGU has a slight gain up to holding for only 2 days , then only losses.

This shows that it has not been good to hold these ETFs for more than 1 day, and again shows that on average most investors lose money with them, a fact which we already knew, but here is some proof - for the average investor.