Saturday, November 21, 2009
FAS & FAZ Why Don't They Work?
Have you noticed that the long term performance of these Triple Strength ETFs do not match the underlying index that they are based on? FAS is based on the Russell 1000 Financial Index and is geared to return 3 times the daily return of the index. FAZ is geared to return 3 times the INVERSE of the index, so it goes UP when the index goes DOWN. 3 times the percentage, a neat trick in of itself. In the chart below, FAZ is Blue and FAS is Orange. (July Reverse Splits 1:10 FAZ 1:5 FAS) This is a Sum Chart FAS + FAZ = Price on Left