ETFs for Gamblers at Morningstar I say gamblers because I’m talking about leveraged funds that can gain or lose large sums of money in a very short time. Casino stuff. (But I’ll close this note with a reference to milder funds risk-averse investors might like.) The ETF screener at the research star Morningstar shows a heavily leveraged fund as leader of all 1,490 screened: FAS (Direxion Daily Financial Bull 3X Shares). Today’s ETF performance screener at Morningstar shows FAS gained 90.5 in 2013 to date and +157.37 in the last 12 months. Also, the screen identifies nine ETFs up triple digits in the last 12 months, ranging from +103.93 to +157.37. From top down, three of the nine are, after FAS: CURE, URTY, TNA. I’ve never recommended a leveraged fund to anyone, so I’m not suggesting that you own one. I try to know about all kinds of funds. Leveraged funds are a thermometer that indicates the health of the stock market. They get hot when the market’s that way. To cautious investors, I’ve often recommended no-load mutual funds with no-12b1 charges and ETFs with no sales commission. You’ll probably find that kind offered by your favorite discount broker. I like the Morningstar ETF screener for its ability to analyze all kinds of ETFs, from those that represent the small value, the mid-cap blend, and the small-cap growth sectors—and much more (including target-date funds) and Long/Short Equity funds. Two of those show double-digit gains in both YTD and the last 12 months: ALFA and CSM. Never forget this: All investments and savings are gambles on the unknowable future and thus subject to loss. balliettinvestor.blogspot My Stock of the Day: FAS Yahoo! says Direxion Daily Financial Bull 3X Shares Fund (FAS) “seeks daily investment results, before fees and expenses, of 300% of the performance of the Russell 1000” index. To reach such an aggressive goal, the fund invests borrowed money on top of investor money. That makes for BIG losses as well as BIG gains in the fund’s resale value. FAS is a fund designed for gamblers, so there’s no way I’ll recommend it for acquisition—to you or anyone else. I follow it and recommend it as a thermometer that measures the heat or the chill of the stock market. My 2-year Yahoo chart for FAS shows damage done in 2011 and 2012 with a strong up trend in the last 12 months. My 3-month chart reveals significant buying opportunities early in May of 2013 and again in June and July, when the FAS 20-day moving average bounced off its 50-day m.a. I’d say that’s an encouraging moment for cautious investors—and an educated guess.
Posted on: Sat, 20 Jul 2013 11:38:44 +0000
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