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Do leveraged ETFs exhibit more tracking error than a regular ETF tracking the same index?

Question:

Do leveraged ETFs exhibit more tracking error than a regular ETF tracking the same index?

ETF Tracking Error:

ETF's are designed to track an index, but there are factors that prevent them from doing this perfectly. This tracking discrepancy is referred to as tracking error and it measures is the annualized difference between the ETF's daily performance compared to it's underlying index.

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What is a Leveraged ETF? - Decay, Risk & Volatility

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Chapter 4 / Lesson 12
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Leveraged ETFs are short-term trading vehicles that multiply the performance of their underlying index and can move wildly in any given trading session. Learn about leveraged ETFs and a few of the common risks associated with them.


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