4J·

Super interesting 2x MSCI WORLD

20.01

LVW

Amundi MSCI World (2x) Leveraged UCITS ETF Acc

Acheté x50 à 4,48 €

224,00 €

21 Commentaires

Harald@Madhatter5566

However, daily leveraged means that this is not a long-term investment.

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TotallyLost@TotallyLost

@Madhatter5566 uhhhh why not, of course there is a path dependency, but this can be reduced by means of a savings plan.
There are also studies on this, but they make it clear that this is only suitable for "risk-tolerant investors".
Young people in particular who have a lot of time and not yet a lot of money can take advantage of this.

https://www.netspar.nl/wp-content/uploads/paper_Balter_Garcia_Schweizer.pdf

We argue that leveraged market exposure over long horizons can be easily achieved with LETFs
and we include these instruments in a continuous time portfolio optimization model based
on Merton (1971). This model shows that welfare gains from lifting the leverage constraint
are sizable for risk-tolerant investors. The continuous specification seems to hold well when
considering the challenges of leveraging in a discrete time world, and it seems suitable for longterm investors that are sufficient risk-tolerant. Yet this limitation is typically inconsequential:
it is mostly risk-tolerant investors who are interested in overleverage. Lifecycle models could
also incorporate LETFs to compensate for the illiquidity of human capital, although risk-averse
investors would reduce their leverage ratios in comparison to continuous model predictions, as
discrete leverage risks are more unpalatable to them

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Harald@Madhatter5566

@TotallyLost Yes, because if the young person has blown all his money, it doesn't sound like much.but if you work out the opportunity cost of the early loss, it's never "little".

In my opinion, this is not particularly good for a world that is rather stable and exposed to the entire global economy. On the other hand, seasonal and then out, such as gas or something like that, is more likely. But that's just work

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TotallyLost@TotallyLost

@Madhatter5566 Sorry, I don't understand what you're getting at?

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Harald@Madhatter5566

@TotallyLost That a leverage gamble on a world is rather poor, as it is not even really volatile. Except during crashes.

Apart from that, high risk only sounds great to young people because the absolute figures appear low in the event of a loss. But extrapolated compared to conservative investments, the losses are actually higher than they appear

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TotallyLost@TotallyLost

@Madhatter5566 Yes, the losses are higher with leverage2.
But so are the gains. And in the long term, leveraged beta brings a higher return than unleveraged beta, as long as the leverage is not too high.
However, the older you get, the more you should reduce the leverage. Keyword: lifecycle investing.

I refer again to the study I linked to above.

But to say across the board "Daily leveraged means that this is not a long-term investment." is wrong as far as I know.

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surgicalinvesting@surgicalinvesting

@Madhatter5566 I can’t find the study right now but I read that a 2x etf would have outperformed 1x etfs for most of indexes except japan. Msci 2x index showed that it would have survived the great financial crisis, there is still the possibility of it going to 0 but you would need a 50% drop in a single day, which is of course possible but highly unlikely. If you allocate a small percentage when you are young you can make your capital work more and once you are older you can scale back.
Additionally, you can actually DECREASE risks with leverage because using a 2x fund frees up capital you can add in an uncorrelated/lower correlation asset like gold or commodities

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surgicalinvesting@surgicalinvesting

@Madhatter5566 I can’t find the study right now, but I read that a 2x ETF would have outperformed 1x ETFs for most of the indexes except Japan. MSCI 2x index showed that it would have survived the Great Financial Crisis. There is still the possibility of it going to 0, but you would need a 50% drop in a single day, which is of course possible but highly unlikely. If you allocate a small percentage when you are young, you can make your capital work more, and once you are older, you can scale back.

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Harald@Madhatter5566

@TotallyLost The statement that it is for high-risk traders says it all. Risky = more return if things go well. Superb, so trivial. To say with hindsight that it was better to do it in period XYZ is just hindsight. That something leveraged that goes up over the period is better than the base value may be true and is trivial. To recommend it to young people, where a total loss triggers massive opportunity costs (their money can earn really long compound interest) is questionable. Your initial loss at the start of the trade can really ruin your future.

In my opinion, it's exactly the opposite. Later, you can leverage with a smaller share because you don't mind a loss.

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surgicalinvesting@surgicalinvesting

@Madhatter5566 you can allocate 5-10% when you are young, you have low capital and you have to make it work. Once you are older you can scale back. That’s how lifecycle investing works. And through a risk parity portfolio you can use leverage to decrease risk, you have to look at the overall portfolio not the single asset

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TotallyLost@TotallyLost

@Madhatter5566 What total loss? For a total loss, the market would have to fall by 50% in one day.

The main risk is the volatility and the "time under water" after a crash, not the total loss.
And a young person can ride out both volatility and "time under water" if he or she has the stomach for it.

In addition, the crash is ONLY bad at the beginning if you go in with a large amount that you can't earn so quickly. (inheritance, for example)
However, if you have hardly any savings and are just building up your assets, the leverage becomes much more interesting.

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