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Cave Emptor: The 7 Most Underperforming 3x Leveraged ETFs Over The Last Year

Last week I published an article entitled How To Buy And Hold Leveraged ETFs: The Top 7 Outperforming 3x ETFs Over The Past Year in which I highlighted those leveraged products that saw gains greater than or equal to three times the performance of their corresponding indices and 1x ETFs. However, as traders of these volatile funds know, these were the exceptions, not the rule: the terms "outperformance" and "leveraged ETF" do not usually go hand-in-hand. Just as important as knowing which leveraged ETFs might make good long-term holds, equally crucial is knowing which diseased ETFs should be avoided like the plague. What follows is a list of the top 7 most underperforming ETFs over the last year through January 23, 2015. Again, this is not necessarily a list of the lowest returning ETFs-Rather, it is a list of ETFs that performed below the expectations set forth by their 1x companions. That is, if a 1x ETF is down 5%, the 3x leveraged ETF "should" decline by 15% or its leveraged inverse should climb by 15%. If the ETF is down more than -15% or up less than +15%, respectively, it is said to…