Posts tagged as:
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 returns when held for multiple trading sessions. [click to continue…]
{ Comments on this entry are closed }
Leveraged ETFs have quickly become the hot-button issue in the ETF industry, dividing investors and observers into two distinct camps. On the one side are sophisticated day traders who believe these funds, which use derivatives and other complex financial instruments to provide amplified daily returns on a target index, are the greatest thing since sliced bread. And on the other are those who accuse these ETFs of being fundamentally dishonest in nature – products that, in the words of legendary investor Jack Bogle, “verge on insanity.” Personally, I fall somewhere in between, believing that leveraged ETFs can be an incredibly powerful tool for sophisticated investors, but acknowledging that there exists the potential for these funds to be used in a detrimental manner by investors unaware of exactly how they function. And while I’m generally inclined to let things be, it’s becoming increasingly clear that this issue will not be going away any time soon unless we address a few key issues. [click to continue…]
{ Comments on this entry are closed }
ProShares, known for pioneering short and 2x leveraged and inverse leveraged ETFs, is once again blazing a new trail in the ETF industry. The fund family has filed for approval from the SEC to launch two new ETFs, a 3x S&P 500 fund and a 3x inverse S&P 500 fund. ProShares‘ proposed funds would be the [...]
{ Comments on this entry are closed }
It’s good to know that we’re not alone. It seems our neighbors to the north are struggling with the issue of leveraged ETFs as well. Last week, the Investment Industry Regulatory Organization of Canada (IIROC) issued recommendations aimed at eliminating inappropriate use of these funds by investors unaware of their risk profiles and the manner [...]
{ Comments on this entry are closed }
In the week during which the Obama administration will unveil details surrounding its plan to revamp the regulation of the U.S. financial sector, calls for increased oversight of the ETF industry are picking up steam as well. Scott Burns, director of ETF Analysis at Morningstar, recently laid out a case for increased regulatory requirements for ETFs [...]
{ Comments on this entry are closed }
Leveraged ETFs are among the most actively-traded securities on any market in the world today, with some turning over several times daily and maintaining average investor holding periods of less than an hour. And their popularity appears to be on the rise, as these funds regularly top the list of monthly ETF inflows released by [...]
{ Comments on this entry are closed }
With last week’s announcement that ProShares has requested that the SEC allow it to provide up to 300% leverage and 300% inverse exposure to 37 different indices, it has become apparent that despite a generally risk-averse economic environment, leveraged ETFs are enjoying a tremendous surge in popularity. In November, rival ETF sponsor Direxion made the [...]
{ Comments on this entry are closed }
Copyright © 2009–2010 Carolean Capital Partners LLC.
All rights reserved. Financial data provided by
.
