3x Leveraged Real Estate

3x leveraged real estate mutual funds and ETFs seek to achieve triple... 3x leveraged real estate mutual funds and ETFs seek to achieve triple the daily returns of a real estate equity index. For example, a 3x leveraged long U.S. REIT mutual fund or ETF will aim to return 3x the daily return of a specified U.S. Real Estate Investment Trust (REIT) index. If the underlying benchmark rises 1%, a 3x ETF should return 3x that amount. It’s important to note that given how often these funds are rebalanced, the effects of compounding mean that they will only achieve their targeted return on a day-to-day basis. For instance, a fund that seeks three times the daily return of U.S. real estate equities will almost certainly not achieve triple the monthly return of these securities. Over time, these funds decay given the rebalancing process. These funds are particularly risky, as a sharp drop of 33% in one day can wipe out the entire capital of a fund. As a result, they are only appropriate for aggressive, experienced traders. Last Updated: 12/23/2024 View more View less

3x leveraged real estate mutual funds and ETFs seek to achieve triple the daily returns of a real estate equity index. For example, a 3x leveraged long U.S. REIT mutual fund or ETF... 3x leveraged real estate mutual funds and ETFs seek to achieve triple the daily returns of a real estate equity index. For example, a 3x leveraged long U.S. REIT mutual fund or ETF will aim to return 3x the daily return of a specified U.S. Real Estate Investment Trust (REIT) index. If the underlying benchmark rises 1%, a 3x ETF should return 3x that amount. It’s important to note that given how often these funds are rebalanced, the effects of compounding mean that they will only achieve their targeted return on a day-to-day basis. For instance, a fund that seeks three times the daily return of U.S. real estate equities will almost certainly not achieve triple the monthly return of these securities. Over time, these funds decay given the rebalancing process. These funds are particularly risky, as a sharp drop of 33% in one day can wipe out the entire capital of a fund. As a result, they are only appropriate for aggressive, experienced traders. Last Updated: 12/23/2024 View more View less