Short and leveraged tracker funds: risky rollercoasters that could bag more bang for your buck

Short and leveraged tracker funds could help amplify your returns, says David Stevenson. But tread carefully: they can turn out to be a rollercoaster ride that could see all your capital vanish

People in suits pretending to ride a rollercoaster
Leveraged products could result in a rollercoaster ride
(Image credit: ©  Getty Images)

Exchange-traded funds (ETFs) have become increasingly popular. Instead of trying to beat the market like their actively managed counterparts, these track an index, commodity or asset. However there is one corner of this fast-growing market that hasn’t received much attention: short and leveraged (S&L) tracker funds. Short trackers enable you to bet on asset prices falling, while leveraged trackers amplify the ups and downs of the underlying index.

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David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.