Nov. 7 at 4:23 PM
📉 Single-stock ETFs have enriched their issuers, but not investors who have ignored the fact that they are designed to be held for only a single day.
Two examples:
📊 3-year performance - Tesla (
$TSLA) stock: +135%. The 2x leveraged Tesla ETF (
$TSLL): +64%
₿ Year-to-date performance - Coinbase (
$COIN) stock: +29%. The 2x leveraged Coinbase ETF (
$CONL): -11%
Yes, you read those correctly.
The culprit: Volatility drag (also called volatility decay), which leads to bigger day-by-day changes.
https://www.aaii.com/investor-update/article/375405-single-stock-etfs-underperform-the-stocks-they-track
