DLCs or Daily Leverage Certificates are a growing interest for investors around the globe. They made their first appearance in Europe in 2012 known at the time as constant leverage products or factor certificates.

Since then, DLCs have become the talk of the town after they are included in the Singapore Exchange (SGX) and people have recognized these certificates as a great way to leverage returns.

But given that DLCs are still relatively new financial investments, there are 5 things an investor should consider before diving in.

As the name suggests, DLCs are exchange-traded financial products which gives a leveraged return based on daily performance of an underlying stock or index. The keyword here is daily performance.

While we are usually customed to the idea of buying and holding stocks for the long term, DLCs work differently in that they are highly leveraged