Think your stock fund is risky? Try these ETFs

▤ Summary

The primary purpose of all funds, including ETFs, is to reduce risk to the investor by diversification. Unless, of course, you create funds that focus on a narrow area and use leverage to goose returns, which is exactly what the riskiest ETFs do . In contrast, the riskiest ETF in the Morningstar database, ProShares Ultra VIX Short-term Futures Fund (UVXY), has a three-year standard deviation of 132.9. Nevertheless, of the 4,714 individual stocks in Morningstar’s database that fit the above criteria, only 32 are more volatile than ProShares Ultra Vix Short-term Futures Fund. It should be noted that while ETFs liquidate and go out of business fairly routinely, none go bankrupt, as individual stocks can.

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