State Regulators View Leveraged ETFs As “Investment Traps” (AGQ, UGL, TMF)

“It appears federal regulators aren’t the only ones keeping a close watch on leveraged and inverse ETFs. Some state securities officials view the funds as “investment traps” and are watching ETF trading a lot more closely, according to an InvestmentNews report. The story quotes just one state regulator. But he was a speaker at a North American Securities Administrators Association meeting.  The official, who’s from Utah, also said that state securities regulators weren’t concerned about diversified, mainstream types of ETFs,” Murray Coleman Reports From Barrons.

Coleman goes on to say, “The news appears to be another potential regulatory thorn in the side of leveraged and inverse ETFs. Despite a nearly two-year run of bad press and increasing regulatory scrutiny, the investment vehicles remain popular. Most of that can be traced to the fact that leveraged and inverse ETFs consistently top performance and volume charts for the industry.”

“For example,  seven of the top 15 ETFs based on total returns this year fall into either leveraged or inverse fund categories, according to Morningstar. Those include three from Direxion, led by the Daily 20+ Year Treasury Bull 3x (NYSE:TMF).  The other major player in that arena, ProShares, has two: Ultra Silver (NYSE:AGQ) and Ultra Gold (NYSE:UGL),” Coleman Reports.

Take a look at our ETF categories on each ETF for more detailed articles below:

Direxion Daily 30 Yr Trsy Bull 3X Shares (NYSE:TMF) – Visit Our (TMF) Category: HERE

ProShares Ultra Silver (NYSE:AGQ) – Visit Our (AGQ) Category: HERE

ProShares Ultra Gold (NYSE:UGL) – Visit Our (UGL) Category: HERE

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