Add Some Leverage to Your Portfolio the Easy Way
You can find ETFs that cover just about any market (“spiders” cover the S&P) or sector (the XLF covers the financials). But did you know there are some that can offer leveraged returns?
Leveraged ETFs do just what they are intended to do: They offer the opportunity to generate greater returns than traditional ETFs. That means they can magnify your gains. Of course, they can also magnify your losses. But with proper risk-management techniques, these leveraged offerings can really boost your portfolio returns.
Let’s say you think the real estate market has found the bottom and things will turn around. In that case, you could invest in the ProFunds Real Estate Ultra Sector (REPIX). This fund is intended to replicate exposure to the Dow Jones U.S. Real Estate Index and seeks results equal to 150 percent of that index. So if the Real Estate Index is up 4 percent on any given day, the Ultra Sector fund will be up six percent.
The Real Estate Index is well diversified in its holdings, with no company making up more than 8 percent of the overall weight and the top 10 holdings making up less than 40 percent of the total. This means the Index (and therefore the Ultra Sector fund) won’t swing wildly as a result of the movement of one or two holdings.
This type of investment is perfect for those looking to generate outsized portfolio returns, or perhaps hedge against risk. Look into leveraged funds to see if one suits your needs.
[Ed. Note: You don’t need complicated systems to make money on your investments. In fact, there’s a genuine, legal, and easy way to potentially make a serious amount of money for very little work.]