Mutual fund alternatives to leveraged ETFs

Depending on your account size, you may have difficulty buying and selling thinly-traded leveraged ETFs. For example, instead of using market orders and getting filled instantly, you might have to use limit orders and wait to get filled at a good price. 

An alternative is to use leveraged mutual funds (they exist!).

*Another option for UST is TLT, the iShares 20+ Year Treasury Bond ETF. Compare the charts over multiple time frames and you’ll see they track together pretty closely.

A few things to keep in mind if you go the mutual fund route:

#1 At every US brokerage we've seen, the funds above are always labeled "No Transaction Fee / No Load / No minimum holding period" so actively trading them is not an issue in terms of fees. Another good thing is you won’t see any intra-day volatility because mutual funds settle after the market closes.

#2 Because mutual funds settle differently than ETFs, you won't be able to buy and sell on the same day. For example, if you sell Fund A on Monday, you can’t buy Fund B until you receive the proceeds from Fund A (Tuesday). Basically you'll be out of the market for 1 day (not a huge deal).

#3 Depending on your brokerage and account type, the mutual funds may have a minimum initial investment.

The important part is the asset class, not the trading vehicle, so a third option is to not use leveraged ETFs at all. Some subscribers follow along using vanilla ETFs and will still do better than buy-and-hold over the long run.

We haven’t had any problems using ETFs but just be aware there are alternatives available.