Australia has a few leveraged ETFs that don't reset on any set schedule (such as daily or monthly). Instead they reset based on maintaining a certain leverage range. For example, GGUS and GEAR maintain 50%-65% percent leverage and reset to the middle of that range once the price changes enough. I think this strategy greatly reduces the volatility decay that daily reset ETFs experience. These Australian products have to move 11.5% after a reset before they reset again. The usually described scenario in which leveraged ETFs decay is when the underlying trades sideways, a few %up and down everyday and the ETF is forced to rest to each of these movements.
Am I correct in thinking that these Australian funds would avoid that decay?
If so, why are there no similar products in the US?
Submitted September 29, 2018 at 09:08AM by jcnz56 https://ift.tt/2IqDcW3
