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Understanding Leveraged ETFs
Although leveraged ETFs share some similarities with non-leveraged
ETFs, there are two key concepts that impact the way they are managed
and the way they perform. Read the pdf file below to find out what
these concepts are.
Understanding the Impact of Changing Market Exposure on Leveraged
ETFs
In essence, leveraged ETFs respond to gains by becoming more
aggressive while they respond to losses by becoming more defensive.
In markets which are directional this can be an advantage; in markets
which lack direction, this can be a disadvantage. Read the
following pdf to see examples of how a 3x leveraged ETF performs in
various market scenarios.
Leveraged ETFs Intraday Volatility
Intra-day, the total exposure of a 3x leveraged fund may be higher or
lower than the stated daily objective depending on the movement of the
target index away from its value at the end of the prior trading day.
Read the next pdf to see demonstrations of how the exposure changes
based on the fluctuations in the value of the benchmark index.
Leveraged ETFs Example of Daily Investment Results
The return of a benchmark index for a given period tells you little
about what that leveraged ETF will return for that same period.
The path a benchmark takes to obtain that return can be of much greater
consequence. Read the following pdf for an example.
Direxion Funds is a leading provider of leveraged index
and other alternative class mutual fund products for investment advisors
and sophisticated investors who seek to effectively manage risk and
return in both bull and bear markets.
For more information please
click here to visit the Direxionfunds site
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