I was looking at return of TQQQ, and was surprised with result.
I understand that, it is not equity based ETF, and is using derivatives. But I could not understand who is acting as counter party of this ETF, for it (TQQQ) to make money 15 folds in 5 years, someone has to loose that much.
So if members can answer and put their views on how this performance.
Note ( taken from comment by Link Ng): LETFs could be evil probably because of leverage decay:
- In a sideway market TQQQ gives a worse performance than expected +3x due to daily leverage reset.
- Leverage decay gives a return that is better than +3x in continuous bull run market.
- A loss worse than -1x but better than -3x in a continuous bear run.