Series 6: 5.3.1.1. Non-Traditional ETFs

5.3.1.1. Non-Traditional ETFs

ETFs as just described are called traditional ETFs, in contrast to the newer and riskier nontraditional ETFs. There are two types of nontraditional ETFs, leveraged and inverse ETFs.

Leveraged ETFs use derivative products such as equity futures and swaps to receive daily returns two to three times above the returns of the index they are tracking. For example, a triple-leveraged ETF is one that projects returns thre