Is a Traditional ETF Like FTXO Better for Profiting With Financials, or Is the Leveraged Fund UYG the Better Bet?
FTXO delivered 28.40% returns over one year with lower costs, while UYG's leveraged structure produced 7.81%.
Overview
Investors choosing between First Trust Nasdaq Bank ETF (NASDAQ:FTXO) and ProShares Ultra Financials (NYSEMKT:UYG) must weigh the relative stability of a concentrated bank index against the high-octane, leveraged exposure of a broader financials fund.
Both exchange-traded funds focus on the financial sector but take vastly different paths. The First Trust fund targets traditional banking institutions for long-term growth, while the ProShares fund seeks to double the daily performance of its underlying index, introducing a specific leverage reset quirk that impacts its risk profile.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield asd of the close of trading on July 22.
Source
Originally published at www.fool.com.