Mutual fund risk-taking via active portfolio rebalancing varies both in the cross-section and over time. In this paper I show that the same is true for funds risk-taking that is not due to portfolio rebalancing (synthetic leverage). For this purpose I propose a novel measure of synthetic leverage that does not require confidential regulatory data. In the empirical application for German equity funds I show that funds overall risk-taking is strongly driven by synthetic leverage. Moreover I find that synthetically leveraged funds underperform and are more fragile.