ETFs | Exchange Traded Funds

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.


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