Interesting funds that I found

Interesting funds that I found.

First of all, the classics are suitable for conservative investors - for example, funds on the S&P500 - there are SPY, VOO from Vanguard with minimal commissions and a huge history. These funds repeat the structure of the S&P500 index and in the long term you can expect 13-15% per annum in dollars with minimal drawdowns. The difference from domestic funds for American indices is obvious - the management fee is 20-30 times lower, which is quite noticeable over a horizon of 5-10 years. Huge trading history. Well, there won’t be a repeat of the situation when, due to a ban from the European depository, all your funds will be frozen and you will not be able to buy or sell anything.

More aggressive, for example Invesco QQQ fund - diversification is lower there and technology companies have a greater weight. Accordingly, the overall return is higher, but the volatility and drawdowns are naturally also greater.

I’ll say right away that there are a huge bunch of other etfs, including for the second and third echelons of companies and individual sectors - technology, biotech, semiconductors, energy, AI and robotics and many others. There are currently 11,350 funds available in IB. And, if you get into a cycle where a particular industry takes off, the return on investment in a specialized fund will naturally be greater. But for me personally, simplicity and adequate history of the fund and index are important. Plus, choosing an industry is already closer to choosing an individual company for investment, which I would like to gradually move away from.

It was literally a discovery for me that there are also many leveraged funds that also trade indices, but with leverage. Roughly speaking, such a fund multiplies the daily performance of the index. Cool database of leveraged funds - https://etfdb.com/etfs/leveraged/equity/#etfs__overview&sort_name=assets_under_management&sort_order=desc&page=1

Accordingly, there is, for example, the SSO fund - ProShares Ultra S&P 500. This is S&P500 x2. Its results will differ from the index and, for example, the regular VOO fund by exactly 2 times. Important: the goal of the managers of these funds is to repeat the DAILY (not LONG-TERM) result of the index multiple times. That is, if the S&P500 grows by 2% today, then a regular fund will grow by 2%, and SSO will grow by 4%. The same is true in the opposite direction; if the index falls by 3%, the “double” fund will fall by 6%. The long-term result of a “double” fund compared to a regular fund will naturally differ by more than 2 times and is difficult to predict in advance. And it’s super important - margin funds have a high management fee (compared to America) - about 1%.

There is a 3x fund on the S&P500 - SPXL - Direxion Daily S&P 500 Bull 3X Shares. The difference with the index will accordingly be threefold.

There are also margin funds for the Nasdaq100 index. "Double" Fund - QLD - ProShares Ultra QQQ. And the "triple" fund - TQQQ - ProShares UltraPro QQQ.

TQQQ - currently the most capitalized fund among all marginal ones - $11.6 billion under management. It has existed for quite a long time - since 2010. The volatility of the fund is prohibitive, for example, it is now in a drawdown of ~65% from the highs, despite the fact that QQQ has lost about 27%. But TQQ has also grown since its founding - February 2010 - by... 68 times, this is at the current price level. QQQ for comparison - 5.77 times. I think it's clear now why I buy TQQQ.