Thursday, April 30, 2009

Performance of HAX Actively Managed ETF

Horizons betaPro launched an actively managed ETF on January 7 2009, the "Horizons AlphaPro Managed S&P/TSX 60", trading under ther symbol on the TSX. BetaPro president Howard Atkinson says the ETF can go to cash if necessary and will use technical analysis from Phases & Cycles' Ron Meisels to over- and under-weight sectors of the TSX60 index. The Management Expense Ratio (MER) is 0.70% and there will be a 20% performance fee levied on top of that.

So, how well did it perform since the close of January 7?

- S$P60: 565.38 vs 550.77, ROI: +2.65%
- XIU.TO: an S&P60 tracking ETF: 14.24 vs 13.87, ROI:+2.66%
- 9.25 vs 9.60, -3.6%

We knew that leveraged ETFs are big money losers, this "actively managed" ETF appears to following on the same path.

Note also how well the XIU ETF tracks the underlying index (XIU is an iShares product).

You can readily see this in this 3-month chart comparing all three:

(kindly click to enlarge)

You can easily compare the performance of these ETFs (or any stocks) with the Paired Performance tool for Firefox, as well as analyze long-short strategies.

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more alpha said...

HAX has underpeformed due to underweight in financials also had a large cash postion. Leveraged ETFs work very well when you understand how the products work and know how to trade!!! Find a trend and follow it. Look at TNA bull 3x small cap in the US or HOD.

The Shocked Investor said...

'more alpha', thank you for your comments.

On HAX: thanks, that may well be the reason for its very poor performance. The point is that it is underpeforming the S&P60 index.

With regards to TNA: TNA has lost 53.4% since inception, and TZA has lost 50%.

If you can somehow ride these things when they move in the direction you chose then yes you will make money. The issue is that the vast majority of people lose money on them. Anyone who holds them for more than even 1 day has lost money - *on average*. There are see other posts about this on this blog. The losses are indeed mindboggling. What is worse, is that people are now using them to gamble, they bet on a direction and buy. On average gamblers also lose.

With regards to HOU and HOD, HOU has lost 94.27% sicne inception, while HOD has gained 122%. So here there is a slight gain, but at a very high risk. It is only a matter of time (days) until these too lose money as a paired trade.

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