XW delivers 2x daily exposure to developed international equity markets outside the US, targeting double the daily return of non-US stocks. Built for traders betting on short-term moves in European, Asian, and other developed markets when US markets look overextended.
How It Works
Uses total return swaps and futures to achieve 200% exposure to an index of large and mid-cap stocks from developed markets excluding the US. Rebalances daily to maintain exact 2x leverage, meaning the fund resets its exposure every trading day regardless of gains or losses. Geographic allocation typically mirrors MSCI EAFE weights with heavy concentrations in Japan, UK, and Europe.
Key Features
- Double daily returns of international developed markets in a single trade
- Captures overnight moves in Asian and European markets before US open
- No currency hedging amplifies both equity and FX movements
Risks
- Daily compounding can destroy value — down 10% over two days means -19% not -20%
- Currency swings add another layer of volatility on top of 2x equity leverage
- Tracking error compounds rapidly — holding for even a week can produce wildly different results than 2x the index
Who Should Own This
Day traders with strong convictions about near-term international market moves, particularly around ECB/BOJ meetings or European elections. Also useful for hedging concentrated US portfolios over 1-3 day periods. Anyone holding longer than a week is using the wrong tool — this is trading dynamite, not an investment.