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Instancetype is a keyword used in the Swift programming language. It is a type specifier that refers to the concrete type of the object that is currently being operated on. This is particularly useful within initializers and methods of classes. When you use instancetype in the return type of an initializer, it signifies that the initializer returns an instance of the *actual* class it's defined in, or any subclass of that class. This is known as a “convenience initializer” pattern in Objective-C and is adopted in Swift for improved interoperability and clarity.

For example, if you have a class `MyClass` and a factory method `createMyClass` that returns an `instancetype`, and you subclass `MyClass` to create `SubClass`, calling `SubClass.createMyClass()` will correctly return an instance of `SubClass`. Without instancetype, the return type would be fixed to `MyClass`, requiring explicit casting when dealing with subclasses. This makes instancetype a powerful tool for creating flexible and reusable factory methods and initializers in Swift, especially in scenarios involving inheritance and object creation. It promotes better type safety and reduces the need for manual type casting in many common programming patterns.