Arturo manages a mutual fund that is benchmarked to the Global Aggregate Bond Index. He currently has a bullish view of the global economy and believes corporate bond spreads are attractive. He is bearish on US Treasury interest rates given his economic growth forecast and expects rates to increase. The fund’s US corporate bond holdings have a duration of seven years. He believes the best opportunities are in emerging market securities, and in particular, he is bullish on Brazilian rates, expecting them to decrease. The fund has experienced strong inflows recently and is fully invested. Arturo is evaluating tools to potentially increase the fund’s total return by creating leveraged fixed-income exposures.

Given Arturo’s plan to leverage exposures in his fund, discuss how he would achieve his objectives and identify the strategy risks.