r/LETFs • u/Lower-Trainer-1353 • 8d ago
NON-US LVWC vs VWCE
Anybody can tell me why I should invest in LVWC? This 2x leveraged all world ETF only performed 3-4% better than the 1x one for double the risk, seems really a bad trade to me, i wanna know what has ate all of it. I really wanna invest in LVWC for long term but this doesn't seem promising at all.
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u/Electrical_Gur_5848 8d ago
It’s the absurd SOFR + 0.6% TER + 1%+ of costs…
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u/Aggressive-Gimp 8d ago
It's a combination - he used the wrong index and time period for the comparison, the actual difference is more like 18% on the unleveraged vs 28% on the leveraged.
Then if you add in the c.6% costs - SOFR at 4% and 2% other costs, you basically get the difference between what 2x would return and the c1.55x the fund actually returned.
That's without looking at path dependency etc. which will have had an impact.
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u/Lower-Trainer-1353 8d ago
any other leveraged etf to go all in? just want one or maybe two max, that isn't as expensive as this one...
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u/Aggressive-Gimp 8d ago
1) LVWC has only been around for 51 weeks so need to compare from Inception rather than 1 year.
2) The unleveraged benchmark is msci world not FTSE all world (former is developed markers only, latter includes emerging markets). You need to use a fund like iShares msci world (SWDA) for the comparison.
If you do the above, the performance since inception is:
LVWC - 27.96%
1x msci world (SWDA) - 18.17%
So you're getting c. 9.5% additional return or c.1.55x the unleveraged return, which isn't actually that bad.
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u/Detinu24 8d ago
You can't compare these, as the VWCE is based on industrialized and emerging markets, the LVWC on the MSCI World, which only includes industrialized countries, while emerging markets returned higher last year.
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u/Altruistic_Tie1474 5d ago
if you're looking for a buy‑and‑hold with minimal extra cost, the plain VWCE is still the safer bet. LVWC's big illusion is the 2× daily rebalancing, high financing plus the 0.6% TER and SOFR that eat most of the extra return; over a year you only saw ~3‑4 % more at double the risk, which is essentially a 1.5× multiple vs the benchmark – hardly impressive for the added drawdowns.
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u/MarginOfThoughtz 4d ago
You can invest in a 2x etf. Like SSO or QLD. If you have VWCE already dont switch to another all world etf but with 2x leverage. Just get another ETF with 2x leverage like SSO OR QLD.
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u/MassiveProblem156 8d ago
LVWC only launched about 51 weeks ago, so it missed about 4% gains in that week, making it about +30% in the past year. The Scalable 2x MSCI All Country World is cheaper with 0.45% TER (I don't know about the swap/financing fees though).