Economics Note: The Distribution of Leveraged ETF Returns

Leveraged exchange-traded funds (“LETFs”) seek to generate returns that are equal to a multiple, ... the volatility of the underlying asset also typically changes its expected return (e.g. , bonds are less volatile than stocks but earn lower e xpected returns). Therefore, we focus on how the leverage multiple and holding period affect LETF returns because these factors are independent of ... ................
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