ShortDAX® x2 Index
The ShortDax® x2 Index (the “Index”) is a leveraged inverse index. The daily percentage change in the level of the Index is intended to reflect twice the daily percentage change in the level of the DAX® Index (the "Underlying Index") on an inverse basis plus an implied amount reflecting the interest accruing on the cash proceeds earned from the sale of the Underlying Index portfolio (the "Interest Rate") less an implied amount reflecting the cost of borrowing the Underlying Index portfolio so as to create the leveraged exposure (the "Borrowing Cost").
The Underlying Index is comprised of 30 of the largest and most liquid companies which are publically traded on the Frankfurt Stock Exchange. Size is determined by reference to the total market value of the proportion of a company’s shares that are freely tradable by the public (i.e. not subject to any restrictions or fixed ownership) and “liquidity” is determined by reference to how actively a company’s shares are traded). Each company is weighted according to its relative size.
In tracking the Index, the ETF is exposed on each day to an inverse multiple (by a factor of 2) of that day’s movement in the value of the Underlying Index as adjusted to reflect the Interest Rate and Borrowing Cost built into the Index and charges and expenses applied to the ETF. As the Index rebalances daily, the ETF may not be a suitable investment for periods of longer than one day.