Hello Clive,
Somehow I seem to be missing what you are saying, or else I am otherwise confused by what you mean when you say "It would appear that the twice scaled based Ultra (SSO) doesn't actually provide twice the longer term benefit as many expect, instead the daily price motions are just doubled whilst longer term average gains tend to align with the underline non-scaled S&P."
The way I understand what you are saying is that over a long period of time the Ultra index fund's returns will be closer to the regular index fund's returns instead of obtaining the goal of returning twice as much as the index fund returns.
If I understand correctly that this is what you are saying then it appears to me that the record does not conform to your theory.
I just did a PerfChart on the ultra S&P 500 index fund from Rydex (RYTNX) and compared its returns to the popular S&P 500 index fund from Vanguard (VFINX). I went back to what is considered to be beginning date of our current bull market--October 8, 2002. Through the close of trading this past Friday the Rydex dynamic ultra fund (RYTNX) has gained some 204.24%. On the other hand the chart shows that the Vanguard index fund (VFINX) has gained 99.25%.
It appears to me at least that the Rydex ultra fund has performed up to its expectations of gaining twice as much as the underlying index.
Maybe I did not understand your comment above the way you intended it to be meant.
Regards,
Ray
