A leveraged exchange-traded funded (ETF) offers investors and traders a leveraged exposure to the price performance of an index. For example, the Direxion Daily Financial Bear 3X Shares (NYSE: FAZ) is designed to offer an investment return approximately equal to 300 percent of the inverse (or opposite) of the price performance of the Russell 1000 Financial Services Index.
These type of leveraged ETFs are perfectly legal and commonly used among investors, traders and hedge funds. However, the Securities and Exchange Commission (SEC) is now taking a closer look at these products and may implement measures that would restrict how much mutual funds can invest in these products.
According to the Wall Street Journal, an SEC proposed rule could treat leveraged ETFs like mutual funds, which could impact hedge funds that take ...
/www.benzinga.com/news/16/06/8079525/sec-may-use-1940-act-to-rein-in-170-leveraged-etfs alt=SEC May Use 1940 Act To Rein In 170 Leveraged ETFs>Full story available on Benzinga.com
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