Setting Aside Myths About Leveraged ETFs

Tom Lydon

With popularity tends to come a lot of criticism and nit-picking. Leveraged exchange traded funds (ETFs) are no exception. Some pundits believe these specialized ETFs have increased market volatility in the last hour of trading. But many investors and people in the media are having trouble getting their arms around the truth. The Securities and Exchange Commission (SEC) has been looking closely at these funds and has had dialogue and visits with ETF providers who are offering them. Here are the facts:

Myth: Leveraged ETFs are too readily available, and average investors will hurt themselves.

Fact: What’s wrong with choices? We’re all adults here. Investors deserve to have options—and the more, ...