Then you know that ETFs are a rip-off because of:
- management fees:
- bid-ask spread on the ETF;
- bid-ask spread on the underlying;
- rolling over the underlying futures contracts and re-balancing; and
- the compounding effect of the above.
An ETF based on futures contracts (commodities, indexes and financials) gradually trends to zero value over the long term. At worst, only invest in an ETF very short term, at best, not at all. They're like Vegas. The house always wins, the house in this case being the ETF promoters, investors in the underlying futures contracts, brokers and exchanges for both the ETF and the underlying futures contracts and the market in general.
ETFs based solely on underlying stocks are the least harmful, ETFs based on futures contracts are worse and leveraged ETFs based on futures contracts are the worst.
Options have many of the same inefficiencies, notably the bid-ask spread of often highly illiquid contracts.
If you must speculate on the price direction of commodities, indexes or financials, trade futures on the Chicago Mercantile Exchange. Then you only have one middleman. You'll need to roll over contracts as they approach expiry if you want to maintain your 'position', street talk for your bet. Only buy a bit. Futures are leveraged roughly 6:1, whereas ETFs are 1:1, 2:1 or 3:1.
Caution: unless you are in the business, 95% of investors do more poorly than the market.
Whatever you are drinking...I think you should share!