Q: I see Longpoint has started a 2X leveraged EFT specific to CSU. Can you explain how this ETF works, and where it might be appropriate in ones portfolio.
Also being a new Etf will significant conributiona / withdrawals have any effect on the price of CSU regular shares.
Thanks John
Also being a new Etf will significant conributiona / withdrawals have any effect on the price of CSU regular shares.
Thanks John
5i Research Answer:
Leveraged ETFs are really meant for day traders only. Using derivatives to get 200% exposure involves daily re-setting of positions, and this causes net asset value decay whether one is right or wrong on the direction of the stock. The ETF has only $1M in assets and we would not expect a big success here. While CSU stock has been volatile of late, we would not even consider it a good day trading stock. These ETFs are essentially gambles and we would not endorse it. A new ETF does have some sensitivity to daily buys/sells. This can widen the bid/ask spread at times.