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It’s no secret that exchange traded products have had a major impact on the investing world, as the low-cost, transparent vehicles have been enjoying strong growth for more than two decades. While it is fair to say that the ETF industry as a whole has changed the investing world, there are also specific products that have changed the investing world forever. Below, we outline five ETFs that forever changed Wall Street upon their debut [for free ETF news and analysis subscribe to our ETF Daily Roundup]. [click to continue…]


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 held by investors for extended periods of times. Because these funds focus on delivering amplified returns on a daily basis, returns over time are compounded, meaning that the effective return over multiple sessions depends not only on the change in the underlying benchmark, but in the path of the index during that period. In trending markets, the return to leveraged ETFs will generally be greater than the simple target multiple times the return on the underlying index. But in seesawing markets — one where gains are frequently followed by losses and vice versa — the compounding of returns can cause erosion of returns to investors who buy and hold. [click to continue…]

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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 […]

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