{"id":186,"date":"2021-12-29T02:53:48","date_gmt":"2021-12-29T02:53:48","guid":{"rendered":"https:\/\/investorimpactlab.com\/?p=186"},"modified":"2022-01-04T22:01:42","modified_gmt":"2022-01-04T22:01:42","slug":"best-leveraged-etfs","status":"publish","type":"post","link":"https:\/\/investorimpactlab.com\/best-leveraged-etfs\/","title":{"rendered":"7 Best Leveraged ETFs To Transform To Your Portfolio"},"content":{"rendered":"\n
The goal of every investor is to have their portfolio outperform the average market returns. However, sticking to only index funds and the regular exchange-traded funds (ETFs) makes it more difficult to achieve this goal. <\/p>\n\n\n\n
On the other hand, leveraged ETFs are a more suitable tool, with the potentials to increase portfolio returns by multiples. In this article, I discussed leveraged ETFs extensively, and more importantly, provided a list of the best leveraged ETFs to transform your portfolio.<\/p>\n\n\n\n
You need no introduction to ETFs, but let\u2019s quickly dive into the world of leveraged ETFs. Leveraged ETFs hold mainly debt and financial derivatives to increase the returns on the index they are tracking, and by extension, the potential earnings of their portfolios by multiples. <\/p>\n\n\n\n
These exchange-traded funds are somewhat more complex and powerful than regular funds, and this is why they offer magnified returns (or losses) on investments. But are they different from the non-leveraged ETFs? Yes, they are. <\/p>\n\n\n\n
Recall that non-leveraged ETFs focus mainly on leveraged shareholder equity, in addition to tracking an underlying index or asset class. Also, regular ETFs aim to match the performance of that index or assets they are tracking. <\/p>\n\n\n\n
In contrast, leveraged ETFs target returns in multiples of the performance of the asset class or index they are tracking,<\/strong> leading to returns higher than the cost of assuming the debt. For instance, an S&P 500 ETF with 5x leverage may use financial derivatives (like options and contracts) to arrive at 5x the gains (or losses) of an S&P 500 market index.<\/p>\n\n\n\n