Short answerLeverage means a fund borrows money to invest more than investors contributed. It can raise gains but also magnifies losses. For ELTIFs, borrowing is capped at 50 % of net asset value for retail funds and 100 % for professional funds.
Leverage is the use of borrowed money by a fund to buy more assets than its investors' capital alone would allow.
Limits for ELTIFs
Under the ELTIF framework, borrowing is limited to 50 % of net asset value for funds offered to retail investors and 100 % for those offered to professional investors. A specific fund may set a stricter limit.
Why it matters
When asset values rise, borrowing can increase the gain on the capital invested. When values fall, it magnifies the loss, and the interest and loan conditions must still be met. Check how much a fund actually borrows and on what terms.
Primary sources
- Regulation (EU) 2023/606 amending Regulation (EU) 2015/760, EUR-Lex (2026-10-01)
General information. Not investment advice or a suitability assessment.
