Oct
28

Leveraged Funds Leading the Way in Record Year for ETF Creation

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  • U.S. regulators have warned about leveraged funds’ complexity
  • Widening market swings in 2011 brought record failure rate

Exchange-traded funds are more popular than ever in the stock market. Even more popular are those using leverage.

In a year where ETF launches are running toward an annual record, funds that employ leverage have almost quadrupled. They’re the ones designed to pay owners some multiple of the gauges they track, usually two or three times the daily return. U.S. regulators have urged caution in the past because of the products’ complexity, warning that amplifying gains and losses can work against investors during extreme swings…

Leveraged Funds Leading the Way in Record Year for ETF Creation

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