However, UPRO stock has also been one of the most volatile leveraged ETFs in the market, with an annualized standard deviation of 43.69%, compared to 15.01% for the S&P 500. This means that UPRO has experienced more than twice the volatility of the S&P 500 over the past 12 years.
The following chart shows the historical performance of UPRO stock and the S&P 500 since 2009:
As you can see, UPRO has outperformed the S&P 500 in most years, except for 2011, 2015, 2018, and 2020. UPRO has also experienced larger drawdowns than the S&P 500, such as in 2011, 2018, and 2020, when UPRO lost more than 40% of its value.
The Bottom Line
UPRO stock is a high-risk, high-reward way to bet on the S&P 500. UPRO can offer higher returns, lower cost, and liquidity to investors who are bullish on the US stock market. However, UPRO can also expose investors to higher volatility, daily rebalancing, and leverage decay, which can reduce its returns and increase its risk.
Therefore, UPRO stock is not suitable for long-term or conservative investors, who might be better off with a plain-vanilla index fund or ETF that tracks the S&P 500. UPRO stock is more suitable for short-term or aggressive investors, who can tolerate the risk and volatility of UPRO and who can monitor its performance closely.
UPRO stock is not a buy-and-hold investment, but a trade-and-sell investment. Investors who decide to invest in UPRO stock should have a clear exit strategy and use stop-loss orders to limit their losses. Investors should also diversify their portfolio and allocate only a small portion of their capital to UPRO stock.
