TY - JOUR T1 - Leveraged Index Investing JF - The Journal of Investing SP - 81 LP - 91 DO - 10.3905/joi.2003.319538 VL - 12 IS - 1 AU - Scott D. Below Y1 - 2003/02/28 UR - https://pm-research.com/content/12/1/81.abstract N2 - This evaluation of the long-run performance of leveraged index investing uses Rydex Nova Fund as a proxy. The results of a regression model are used to predict the fund's performance from 1950 through the time it was actually established in 1993. A Monte Carlo simulation suggests that the probability of outperforming the underlying index goes to one as the holding period goes to infinity. The volatility of the underlying index and the geometric nature of returns means that the return magnification achieved by leveraged funds over time will be lower than the fund's daily target magnification. ER -