Financial Times FT.com

‘Upside-down’ investors may not see risks

By Sophia Grene

Published: November 1 2009 09:05 | Last updated: November 1 2009 09:05

Index tracking or passive investment is now well established as a sensible form of investing. But what if you believe the index in question is likely to fall? Or you think it will rise and you want to exploit your belief to the utmost?

For investors with those beliefs, there are inverse and leveraged indices. Although these sound straightforward – just take an index and turn it upside down! – it does not work quite as simply as that.

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