Thursday 25 June, 2009:

It has finally happened. Someone has been brave enough to issue some UK listed geared exchange traded funds - both on the upside and the downside.

The courageous company is none other than ETF Securities - the details for these new leveraged index trackers are below.

• ETFS FTSE 100 Leveraged (2x) Fund - EPIC LUK2 - TER 0.50%

• ETFS FTSE 100 Super Short Strategy (2x) Fund - EPIC SUK 2 TER 0.60%.

There are also some geared or leveraged trackers on the CAC 40, the Dow Jones Euro Stoxx 50 and the DAX (all 2x).

Now I’ll be returning to this subject in my column in a few weeks time - these leveraged trackers are the subject of huge debate and open animosity in the US where another innovator called Direxion has launched a much larger range of geared trackers that offer up to three times the daily returns on the upside and the downside.

For now, however, the key words to bear in mind are ”daily returns” - you’re only getting the leveraged daily returns with these funds. These are in absolutely no way a long term play on the markets - the market might trend in a volatile fashion up but your leveraged upside index trackers could still produce an overall loss over that period if you’ve also experienced some chunky day losses.

It is as the economists like to say, ‘the wonder and the awesome vengeance of compounded returns’. Now to be fair to Direxion they’ve covered themselves with lots and lots of warnings that these products are not suitable for long term investors and they’re also planning to launch some much more compelling monthly returns based trackers in the next few weeks – which I think would be a great idea.

David Stevenson is also one of the Four Wise Monkeys at the online TV investment programme www.4wm.co.uk

adventurous@ft.com