 The
Brazil Bull 3X Direxion ETF (BRZU) seeks daily investment results,
before fees and expenses, of 300% of the performance of the MSCI
Brazil 25/50 Index. This index is a market capitalization-weighted
index designed to measure the performance of the large- and mid-cap
segments of the Brazilian equity market.
As a leveraged ETF,
BRZU is designed to magnify the daily returns of the underlying index
by a factor of three. This means that if the MSCI Brazil 25/50 Index
rises by 1%, BRZU should rise by 3%, excluding fees and expenses.
However, this also means that if the index falls by 1%, BRZU would be
expected to fall by 3%.
It is important to note that leveraged
ETFs like BRZU are designed for short-term trading, and are not
suitable for buy-and-hold strategies. This is because the effects of
compounding returns can cause the returns of a leveraged ETF to differ
significantly from the returns of the underlying index over longer
periods of time.
Investors considering BRZU should also be
aware of the risks associated with investing in emerging market
equities. Brazil is a developing market and is subject to higher risks
compared to developed markets, including political instability,
currency fluctuations, and economic volatility. Additionally,
leveraged ETFs like BRZU can experience higher volatility and may not
be appropriate for all investors.
As of September 2021, BRZU
had a net expense ratio of 1.12% and had total net assets of
approximately $181 million.
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