How does a leverage investment products work?
A leverage investment is an investment that returns a specific multiple - 1.5 times, 2 times, 3 times etc - of its underlying asset during a specified period. This period could be one day, a week, a month etc.
The aim of XACT Bull and XCT Bear is to return, before management fees and transactions cost, +/-1.5 times the daily return of the OMXS30™ index. This aim is in no way guaranteed by the funds or the fund company.
XACT Bull and XACT Bear have many similarities with XACTs offering of exchange traded funds without leverage. There are, however, two crucial differences.
- Leverage: For each 100kr that you invest in the fund the fund will invest 150kr on the stock exchange. This means that the fund has a 150% greater risk than a fund without leverage.
- Daily Rebalancing. XACT Bull and XACT Bear aim is to, on a daily basis, return 1.5 times of the return of the OMXS30™ index. The funds return over a longer period than one day will deviate from the index return over that period multiplied by 1.5. This is due to the effect of daily leverage. The daily rebalancing ensures that the leverage at the start each trading day is always 1.5.
XACT Bull and XACT Bear has a strict investment strategy, the strategy does not take into account market expectations. The funds value corresponds to its underlying holdings which are communicated to the market on each trading day. More information on valuation and the funds underlying holdings can be found under Fund Holdings.