ProShares, the issuer responsible for pioneering leveraged and inverse ETFs, has filed prospectuses for 16 new funds. Expansion is nothing new for ProShares–the company has launched a handful of new ETFs over the last year–but the filing was interesting because it detailed plans for 300% leveraged ETFs. ProShares’ current product line, which consists of more than 90 funds, includes only two ETFs with 300% leverage, the UltraPro S&P 500 (UPRO) and UltraPro Short S&P 500 (SPXU). [click to continue…]
ProShares made an addition to its line of leveraged fixed income products on Thursday, launching the Ultra 7-10 Year Treasury (UST) and Ultra 20+ Year Treasury (UBT). UST seeks daily investment results that correspond to 200% of the daily performance of the Barclays Capital 7-10 Year U.S. Treasury Index, while UBT will seek to deliver daily amplified returns on the Barclays Capital 20+ Year U.S. Treasury Index. [click to continue…]
One of the major stories in the ETF industry over the last year has centered on the appropriate uses and potential abuses of leveraged ETFs. In the wake of the unprecedented equity market volatility during 2008 and the first quarter, some investors expressed dismay over the performance of 2x and 3x leveraged funds over multiple [...]
Leveraged ETFs were in the headlines a great deal in 2009, but most of the coverage was less than favorable. Misinformation on these products was widespread throughout the year, leading to confusion on many aspects of these products and some unfair generalizations.
One of the primary points of discussion was the performance of leveraged ETFs when [...]
Effective December 1, the Financial Regulatory Authority (FINRA) will implement new margin requirements for leveraged ETFs and uncovered options overlying leveraged ETFs. Under Regulatory Notice 09-53, which was first released in August of this year, margin requirements for leveraged and inverse leveraged funds will increase significantly beginning on Tuesday.
Bethesda, Maryland-based ProShares announced on Tuesday that it expects to pay zero 2009 year-end capital gains distributions on all 77 of its leveraged and inverse equity and fixed income exchange-traded funds, putting at ease any investors who had been questioning the tax efficiency of leveraged funds. “While we manage ProShares to minimize capital gain distributions, [...]
Over the last year, leveraged ETFs have been the subject of intense scrutiny from a number of parties, including regulatory agencies, state governments, broker-dealers, individual investors, and even class action lawyers. While several aspects of leveraged ETFs have been thoroughly analyzed and debated, perhaps no issue has drawn more attention than the effects of compounding [...]
Leveraged ETFs have been bashed quite a bit in the financial press quite in recent months, as investors who haven’t quite been able to grasp the complexities of these products have lashed out at issuers for offering what they view to be defective products. A great deal of the complaints about leveraged ETFs (which, unfortunately, [...]
Direxion, the ETF sponsor responsible for many of the most heavily-traded ETFs on the market, is reportedly making some changes to its line of mutual funds that may ultimately impact the leveraged ETF industry.
Gilman and Pastor LLP have filed a class action lawsuit in the U.S. District Court for the District of Maryland on behalf of investors who purchased the ProShares UltraShort MSCI Emerging Markets Fund (EEV), alleging that ProShares issued “false and misleading Registration Statement, Prospectuses, and Statements of Additional Information.” The complaint goes on to allege [...]
In a step apparently intended to calm some of the fury surrounding the sale and use of leveraged ETFs, the Financial Industry Regulatory Authority (FINRA) announced Tuesday that it will raise margin requirements for leveraged ETFs beginning December 1. Regulatory Notice 09-53 states that “in view of the increased volatility of leveraged ETFs compared to [...]
Leveraged ETFs have taken a beating in the financial presses lately, mostly the result of misconceptions about the intended uses and users of these funds. Most of the criticism has focused on the performance of leveraged ETFs when held for multiple trading sessions. Because leveraged ETFs seek to amplify the return on their underlying benchmarks [...]
