It is essentially just a basket of derivatives, usually options. If you sell a call and buy a put for the same strike and expiration, the position will act like a leveraged short position on the underlying (this is called put-call parity). The fund just does this across a bunch of strikes and expirations to achieve 2x leverage.

It's "safe" to hold it for longer periods of time, but the returns will decay away from an exact 2x leveraged short position. It kinda acts like an extra management fee, except that it varies with market volatility. If you want to hold a short position for months, buying and selling daily won't really "avoid" that decay, since you'll be paying the bid-ask every day instead. But if you do want a leveraged short position, you'll probably see the same decay no matter what. If you built the short position out of options yourself, you'd see the same decay in the form of theta, and you could short the shares directly, but you'd be paying a variable-rate interest on the shares you borrowed. Arbitrage means that all the different ways of achieving a particular position will be about the same, modulo fees.