The SEC’s recent decision to take a closer look at the use of swaps and other derivatives by exchange-traded products and mutual funds has once again thrown leveraged ETFs under the microscope, as regulators begin examining the tools and strategies employed by these products to accomplish their objectives. During the study, approval of any ETFs that “particularly rely on swaps and other derivative instruments to achieve their investment objectives” will be halted, a move that will bring expansion of two of the fastest-growing corners of the ETF market–leveraged and active ETFs–screeching to a halt. [click to continue…]
The United States Natural Gas Fund (UNG) has found itself at the top of a number of lists this year. The natural gas fund has been one of the most popular exchange-traded products, with cash inflows to date in 2009 of $5.4 billion, more then four times the assets UNG maintained only a year ago. [...]
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 [...]
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 [...]
The old saying “any publicity is good publicity” certainly seems to ring true in the ETF industry. Over the last several months, leveraged ETFs have been the subject of intense scrutiny, first from individual investors and analysts, and more recently from regulatory agencies such as FINRA. Despite allegations that these funds are dishonest products that [...]
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 [...]
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 [...]
After growing at a torrid pace in 2008, the ETF industry had showed signs of slowing down through the first four months of 2009. But May represented a return to old form, with more than $14 billion in new assets flowing into ETFs during the month according to Morningstar, the largest monthly inflow of the [...]
