jbs

The Case Against Leveraged ETFs

Although they may not be "borrowing" funds from the bank, the derivatives serve the same purpose and they have a cost also - the premium. The premium can be equated to the cost of borrowing because it is the cost of gaining the leveraged exposure.

The Case Against Leveraged ETFs

Very good article that brings many of the lesser-known issues to the forefront.

The issues you address are becoming more significant as ETFs are marketed to retail investors. I fear that uninformed retail investors are buying these ETFs that are marketed to boost returns. They'll eventually get burned and the only people coming out ahead will be the traders who used the ETFs intelligently and the firms that market them.