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You don't. It appears to be a common misconception that you get double the annual returns. The fund tries to get double the daily returns, but also lags in this because of the high internal transaction costs.
I just started reading up on these leveraged funds. The leverage is not free, you will pay at least the risk free rate. Other costs include taxes on the dividends (much greater than a vanilla etf), high expense ratio, front end load fee.
Take a look at these articles:
http://seekingalpha.com/article/3119...struction-trap
http://seekingalpha.com/article/3578...leveraged-etfs
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thats what i get for blind faith in my old employer lol.
i didn't even run the #s as an example.
thanks for the links. the articles are very well done even if they don't deal in excess returns (mostly b/c it isn't necessary to prove the point)
i'm gunna have to say then that it is currently not possible to generate the portfolio i'd like to build with this leverage due to the failures of the leveraged funds to produce double the long term returns not even counting fees.
thanks again for the post.
Barron