How much can funds leverage their common shares?
Closed-End ETFs typically have a leverage ratio between 33% to 50% of assets. For example, a Closed-End ETF with $100 million in assets may borrow $50 million, for a ratio of $50/($100+$50) or 33%. Typically, only Closed-End ETFs that leverage through the issuance of preferred stock have leverage ratios approaching 50%.