Each day many traders and investors turn to leverage as a method for trying to increase their returns. For those new to finance, leverage involves using borrowed money and investing it into a security in hopes of making a bigger gain than they would have realized if leverage was not used. In the ideal situation, the gain that is made with the borrowed funds is more than the interest and associated fees that are required for establishing the position. Common tools that involve using leverage include options and futures. (For more, check out: Leveraging Leverage For Bigger Profits .)

For most traders trading and options and futures is just not possible given the sophistication of these products. However, given the rise in popularity of exchange-traded funds in recent years, portfolio managers have started to incorporate these leveraged products into their fund’s holdings. Most commonly, leveraged products are used so that the performance of the exchange-traded fund is either twice or three times that of an underlying benchmark. (For more, see: Options and Futures Articles )

The invention of these leveraged ETFs has been great news for emerging markets investors, who can invest in ETFs that focus on specific countries. Given its fast-growing economy and expanding middle class, it’s little wonder why China is often at the top of the list for those looking to invest overseas. For risk-taking investors in the U.S. who want to use leverage to profit from China’s growth, the most popular choice is the Direxion Daily FTSE China Bull 3x Shares (YINN ).

YINN ETF Fundamentals

For those new to this ETF, YINN seeks to track the daily investment results, before fees and expenses of 300% of the performance of the FTSE China 50 Index. Given the nature of triple-leveraged ETFs, it’s important to note that the fund seeks to replicate three-times the performance of the benchmark index for a single day. These types of funds should not be used or expected to provide three times the return of the benchmark over a cumulative period greater than one day. (For more, see: Dissecting Leveraged ETF Returns .)

Taking a look at fees, YINN trades with a respectable gross expense ratio of 1.07%. Over the past six months, the fund has increased by an amazing 47.14%. Based on the chart below, you can see that fund is trading within a significant uptrend and that the nearby support has propped the price up on each pullback since the start of the uptrend in mid-2013. Traders will hold a bullish outlook on China and the YINN fund until the price closes below the long-term moving average and the ascending trendline, which are both trading near $25.68. (For more, see: Support and Resistance Basics .)

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YINN’s Top Holdings

Some investors may want to narrow their focus down to a couple of the top holdings that they think may have the highest upside potential. Many holdings of the ETF only trade on the Hong Kong Stock. so traders may want to limit their focus to those picks that trade as American depositary receipts. For those interested in the holdings of the fund, you can see the top ten holdings below: