The article examines two ETFs, the leveraged ProShares Ultra S&P 500 ETF (SSO) and the traditional iShares Core Dividend Growth ETF (DGRO). SSO boasts an impressive 26.0% annualized return over the past five years, while DGRO offers a steady 14.0% return backed by consistent dividend payouts. Although SSO's returns are attractive, its higher expense ratio and lack of dividends raise questions about sustainability. The analysis invites investors to consider the long-term implications of relying on leveraged funds versus the steadiness of dividend growth investing.
At first glance, leveraged ETFs seem to eclipse traditional investments, notably SSO's stunning 26.0% annualized return versus DGRO's 14.0%. However, deeper analysis reveals concerns about long-term sustainability.
DGRO is a fundamentally sound choice with a robust dividend growth strategy, producing steady income, while SSO's high returns come with increased risk and costs that may outweigh long-term gains.
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