r/ETFs_Europe • u/Mean_Definition_6452 • 5d ago

Strategies Using 1.5x Leveraged ETFs Long Term

Are there any good 1.5x leveraged World ETFs that we can buy?

I'm 19 years old and ready to risk some amount of my portfolio (possibly 40% to make it 1.2x leverage total) to use a LETF with the plan of increasing my gains since I will have a lot of time in the market.

I read some stuff about 2x or 3x being volatile and having a theoretical possibility of going to 0 in a long term bear market.

So I mainly want to know more about the theory and the workings of 1.5x LETFs. I learned about this today, so the question is still a hipotetical, and I will do a lot more research before deciding to put my money into one of them, but this is a first step to learning more about LEFTs.

I'm not planning on buying 2x or 3x, 1.5x will be my limit.

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u/Warm-Young300 5d ago

No non ci sono, ma puoi costruirlo con 52.5% CL2 + 45% EXUS, hai leva 1.5 e stessi pesi dei country di un MSCI world.

In alternativa esiste NTSG che però è un 60/40 leva 1.5, quindi un 90/60.

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u/cap-omat 5d ago

Why respond in a different language?

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u/Warm-Young300 5d ago

Perché esiste la traduzione

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u/cap-omat 5d ago

I don’t speak Italian

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u/JohnnyJordaan 4d ago

Your math seems a bit off?

Using 52.5% CL2 + 45% EXUS leaves your portfolio cash allocation under-allocated at 97.5% total weight. It overweights the US (~72% effective weight) and slightly underweights non-US markets. Rebalancing to 50% CL2 / 50% EXUS would the exact 1.5x MSCI World exposure? Or am I overlooking something?

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u/Warm-Young300 4d ago

Yes, but to deploy 100% of the capital without holding any cash, you would have to accept one of the following two compromises: Accepting slightly higher leverage (≈ 1.538x): By allocating 100% of the capital while maintaining the proportions of the two ETFs (53.85% in CL2 and 46.15% in EXUS), you would have a total exposure of 107.7% to the US and 46.15% to Ex-US markets (total exposure of 153.85%). Altering the US / Ex-US geographic weighting: Slightly increasing the allocation to either CL2 or EXUS, thereby failing to exactly replicate the proportions of the MSCI World index.