"AGQ is a derivatives-based fund that targets twice the daily return of a silver futures benchmark using a stack of futures contracts, swaps, and other derivatives. It is built for trading, not for the buy-and-hold inflation-hedge role silver itself often plays."
"Open interest in silver futures has dwindled toward 100,000 contracts as physical demand pulls metal off COMEX, pushing the curve into backwardation. Backwardation is unusual for silver and, in theory, can produce a positive roll yield for AGQ."
"The 12-month return looks like vindication for AGQ holders, but the longer arc is brutal. Over five years, AGQ returned about 145%, and over 10 years, just 167%."
ProShares Ultra Silver ETF, designed for tactical trading, returned 184% over the past year but is down 28% year to date. The fund targets twice the daily return of silver futures using derivatives, making it suitable for short-term speculation rather than long-term holding. Its performance is influenced by the futures curve, which is currently in backwardation due to dwindling open interest and physical demand. While the 12-month return appears strong, longer-term returns over five and ten years are significantly lower.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]