Investors Are Using Leveraged ETFs to Turbocharge AI Bets

Investors have increased purchases of leveraged exchange-traded funds that track artificial intelligence and semiconductor stocks, according to market data reviewed by analysts. These funds amplify price movements of underlying holdings, including SK Hynix and similar companies. Leveraged ETFs typically use derivatives and borrowed money to deliver multiples of daily index returns, ranging from 2x to 3x leverage. Financial advisors note the strategy carries elevated risk during volatile market periods, as leveraged funds can lose value more rapidly than traditional index funds during downturns.

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