3.5.3. Comparing Leveraged and Inverse ETFs and ETNs
Familiarize yourself with the following table about traditional and non-traditional ETFs and ETNs.
| Traditional ETFs | Leveraged ETFs | Inverse ETFs | Traditional ETNs | Leveraged ETNs | Inverse ETNs | |
| Returns | Index return | Multiple of index (2x) | Inverse of index (-x) | Index return | Multiple of index (2x) | Inverse of index (-x) |
| Tracking Error | yes | yes | yes | no | yes, if held more than a day | yes, if held more than a day |
| Suitable for buy and hold strategy | yes | no | no | yes | no | no |
| Suitable for diversified long-term portfolio | yes | no | no | yes | no | no |
| High expense ratio | no | yes | yes | no | yes | yes |
| Tax efficient | yes | no | n |
