It has 30%/year decay. I post this once in awhile:
If you read the profile of an ETF, you will find the term "resets daily". That's a nice way of saying "decay." The management of the fund removes a bit of the price, every night, including their management fees. The more leveraged the fund is, the bigger the % of the decay.
Some (most) of the decay comes from the instruments they use to get the leverage - options, swaps, and futures.
What you want to do is join management, if possible, by shorting a "long" ETF.
I wanted the most leverage I could get on bonds, so I looked for a triple long bond ETF, to short. Couldn't find one, so I bought TMV.
If you're going to own an ETF, it must keep moving in your direction, or you're going to lose, over time. The loss will be 4%/year, or a lot more, in some cases. The decay, in some of them, is so severe, they do reverse splits.
If you want to stay in them for longer time periods, use an ETN (exchange traded note), they reset on the first of every month, so management takes their piece then.
For an example, if you want to short silver, you short SLV, if you want the leverage, you short AGQ
This is easy to prove for yourself, just do a time study as to the ETF price-against the basis. The worst one is UNG, the natgas ETF.
Thanks for the reply. Wondering why you bought TMV in the face of the decay that you explained? Or is your take that the chances of TMV surging to a point it "defeats" the decay? I just can't see how bonds can continue the run; although the FED could keep the party rolling.