“You’re currently holding the following leveraged products, which are designed for short-term trading. According to the product manufacturers, the recommended holding period is 1 day”
The products in question are JEGP and JEQP.
This is interesting and conflicts with the info supplied by the ETF provider;
“Investor profile: This product is intended for investors who plan to stay invested for at least 5 years”
The email does state “This message is for your information only—no action is required.” so, I am not sure how to take this, as a friendly reminder or something else.
It’s just a general comment/warning about leveraged products.
Most ETFs are not leveraged, so these warnings don’t apply.
But some ETFS are leveraged (2x, 3x, -2x, -3x, etc.) - hence T212’s warnings do apply.
I think T212 is just informing users to be aware of leverage products’ magnified moves, which can amplify your profits and losses.
Since leveraged products amplify moves, they do require a decent understanding & quite of bit of hyper watching to minimise the risk in case they turn against you.
Correct, ETFs can be held for longer periods, and generally leveraged ETFs are held for shorter durations. But you can hold ETFs for short durations and leveraged ETFs for longer durations too, although the latter isn’t too common and not very productive if you understand how they work.
A general example (if useful) using the QQQ - TQQQ - SQQQ.
QQQ is the underlying/reference ETF.
TQQQ (3x long QQQ) delivers 3 times the daily QQQ move
TQQQ & SQQQ only target to reflect daily moves, not a multi-day or long-term move.
Price “resets” daily, so they rarely deliver the exact 3x the underlying’s return during a multi-day / longer period of time hold.
Thanks for the explanation. This probably explains why the chart looks like an ant has walkied in random directions. I don’t hold these for any growth but for the decent 8 & 10 percent dividends, plus I monitor all my ETFs twice a day anyway.
Thanks for bringing this to our attention. We investigated this further, and the email was sent incorrectly for both holdings. We have made the necessary adjustments to prevent this from happening again. Apologies for the inconvenience
