It corresponds to an anticipation of the risky asset rise. They aim at double or triple the daily performance of a given financial index. Such funds are usually riskier than the standard ones. The leverage consists in borrowing on a riskless asset to increase the amount invested on the risky one. In May 2018, the global market for leveraged and inverse ETFs has 263 ETFs including 126 doubles + 2X leverage ETFs and 44 triples + 3X leverage ETFs as well as 66 double inverse ETFs. In 1997, the company ProFunds was the first to issue a version of the S&P 500 inverse and leveraged index from two mutual funds. Among the products that have been issued to achieve such objective, are the Leveraged Traded Exchange Funds (LETFs) and the Inverse Exchange Traded Funds (IETFs). Such risky and often unpredictable environment encourages part of investors to choose products that can enhance equity index performances to maximize their expected wealth. Financial markets are characterized by their uncertainty as illustrated by the permanent fluctuation of most financial product values.
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