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Investors should always be aware of the higher risk they are taking on when trading such products instead of simply buying and selling stocks. Inverse, short and leveraged ETFs are sophisticated investment products that should be treated cautiously. Investors should also approach leveraged ETFs with caution since they could easily double or triple their losses. Long term investors should generally avoid inverse short ETFs, given that they tend to lose value over time. The ETF’s prospectus from Direxion clarifies that its primary goal is to generate a daily return for traders and that the ETF does not track the long term performance of the underlying index.
![drip stock price drip stock price](https://s3.tradingview.com/v/VS8Shm3s_mid.png)
Hence, the traders who will benefit from the DRIP ETF as those who want to short the oil markets. Unfortunately, as an inverse bearish ETF, DRIP’s primary target is to generate a negative 200% return on the daily movements of the S&P Oil & Gas ETF. The ETF targets day traders who want to profit from the intraday and daily price moves of the underlying S&P Oil & Gas ETF but want to turbocharge their returns. The 2X inverse ETF has been falling as oil prices and oil stocks rally, which has seen it lose 57.8% of its value so far this year. Also read: The Best Suitable ETFs To Have in Your Portfolio.ĭRIP tracks the performance of the S&P Oil & Gas Exploration & Production Select Industry Index (SPSIOPTR) index, which is issued and managed by the Standard & Poor’s Index Provider. Since the year started, the 2X inverse bear ETF has lost 57.8% of its value and was headed lower, necessitating the reverse stock split to boost its share price.