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Understanding Leveraged ETFs

Leveraged ETFs can lead to big returns or big losses. Join Kate as she explains these funds and how to (and how not to) trade them.

Join Cabot’s Kate Stalter as she returns with a video offering insight into understanding leveraged ETFs and the place they may have in your portfolio. She explains what differentiates leveraged ETFs from traditional ETFs and how those funds obtain their leverage using derivatives. Kate emphasizes that these leveraged funds are not intended as long-term holdings, citing a prior interview of the CEO of Direxion (one of the oldest names in leveraged funds).


Kate then goes on to break down the historical returns of a very popular leveraged fund with over $3 billion assets under management (AUM). Lastly, Kate shifts to inverse leveraged funds and explains both the need for exceptional market timing and the inherent volatility risk. The ETFs featured in this video are used for educational purposes only and should not be considered recommendations.

Have you traded leveraged ETFs in your own portfolio? What has your experience been?


Kate Stalter is a Series 65-licensed asset manager, with more than two decades of experience in various areas of financial services. As an investment advisor and financial planner, Kate personally manages client portfolios, with a focus on successful retirement, including asset allocation, income generation and tax strategies.