How does the funds create their leverage?

XACT Bear and XACT Bulls underlying value is OMXS30™ future contracts and cash. The future contracts create the funds exposure to the stock market and leverage.

XACT Bull which has positive leverage holds cash and a long position on OMXS30™ futures corresponding to 150% of the funds value.

XACT Bear which has negative leverage holds cash and a short position in OMXS30™ futures corresponding to 150% of the funds value. 

The funds exposure is adjusted daily

The funds leverage is rebalanced on the close of each trading day.

At the start of each new trading day XACT Bull and XACT Bear has an exposure to OMXS30™ index corresponding to roughly +150% for XACT Bull and roughly -150% for XACT Bear. Daily market movements will increase or decrease the total net asset value of the funds. If the market has increased during a trading day the value of XACT Bull will have increased whilst the value of XACT Bear will have decreased.

To ensure that the leverage stays at roughly 150% a daily rebalancing of the funds is needed. This is done by either buying or selling futures contracts so that the exposure is as close to +/-150% as possible before the start of the next trading day. Your risk and return potential is hence proportionate to the value of your fund units, and not your initial investment.