Current performance may be lower or higher. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Investment returns will fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost. Performance data quoted represents past performance and does not indicate future results. Schwab's Financial and Other Relationships with certain ETFsĪs your agreement for the receipt and use of market data provides, the securities markets (1) reserve all rights to the market data that they make available (2) do not guarantee that data and (3) shall not be liable for any loss due either to their negligence or to any cause beyond their reasonable control. Leverage inherently increases the level of risk in a portfolio. Bond funds that use leverage have the potential to increase the amount of income that they pay out, but at the cost of larger drops in value during a falling market. These funds are not appropriate for most investors.įunds that borrow money to purchase more assets in this way will generally move up more than the market when the market rises and move down farther than the market when the market falls. It is important to remember that these securities are generally designed for daily use only, and are generally not intended to be held overnight, because their returns over longer periods generally do not match the ETP’s multiple of the underlying index over those periods. They have the propensity to be more volatile and are inherently riskier than their non-leveraged counterparts. These securities trade much differently than other ETPs. Leveraged ETPs (exchange-traded products) typically use derivatives to attempt to multiply the returns of the underlying index each day.
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