This is a leveraged ETF designed to track twice the daily performance of a US health care sector index. It provides amplified exposure to the daily moves of the health care industry as a whole, including pharmaceuticals, biotech, medical devices and health care services.

It suits aggressive short-term investors who want amplified exposure to near-term gains in the health care sector and who understand the compounding effects and volatility of leverage.

It is a passively managed (index-tracking) ETF run by ProShares.

To track twice the daily return of the health care sector index, the fund uses derivatives such as swaps. Because the target multiple resets each day, the cumulative return over multiple days can differ from a simple doubling, depending on the path and volatility of the index.

• Twice-daily leveraged exposure to the health care industry
• A structure built for short-term directional trading

Assets under management (AUM) stand at $111.9M, and the expense ratio is 0.95% per year.

Because of the leveraged structure, volatility losses can accumulate over a long holding period, making the fund better suited to short-term use.

Because it reflects the moves of the health care sector in amplified form, gains expand sharply when the underlying industry is strong, and losses expand as well when it is weak. Given its leveraged nature, volatility is considerably greater than that of the underlying index.

The fund is sensitive to issues affecting the health care industry as a whole, such as interest rates, regulation and drug pricing policy, and its fund flows swing widely with demand for short-term directional trading. Trading tends to become more active when market volatility rises.

Its strength is amplified exposure to health care upside, while its weaknesses are the greater volatility that comes with leverage and compounding losses over long holding periods.

Products shown in the table such as TQQQ, SOXL, QLD and SSO provide leveraged exposure to Nasdaq, semiconductor and large-cap indexes. Their sectors differ, but they share the same daily leverage structure. Alternatives that focus on the health care sector itself include CURE, which offers a higher multiple, the inverse product RXD, which bets on the opposite direction, and XLV and IHI, which invest in health care broadly without leverage.

Here are the points to check before investing in RXL. Leveraged ETFs differ greatly in character from ordinary ETFs, so it is necessary to confirm the structure and your holding period in advance.

Leverage and the daily reset structure greatly amplify volatility, and in sideways markets, compounding losses can accumulate even if the underlying index stays flat. If the direction goes against you, losses can grow quickly.

It is a trading tool suited to aggressive investors who want amplified exposure to short-term gains in the health care sector. It is unsuitable for long-term investing, and if you want lower-volatility exposure, a non-leveraged product such as XLV is a better fit.