Leveraged fund

Margin fund, leveraged exchange-traded fund is an ETF which investment strategy is to multiple (more often 2x or 3x) exceed of the stock index rate of return (more often daily yield) or other indicator taken for a benchmark (for example, the price of gold) using derivative financial instruments (swaps). Leveraged fund can be direct or inverse (reverse), depending on whether the leverage implies a change in sign of the fund's yield in relation to the sign of the indicator's yield. They are defined as high-risk financial instruments. Leveraged funds, direct or inverse, focus on the phases of the financial and economic cycle (market growth - market decline), allowing investors to make profit on the expectations of market participants and the formation or collapse of financial bubbles. Commodity markets, currency markets, medium- and long-term bond markets, stock markets and emerging economies bond markets are attractive to leveraged funds.