Leveraged and inverse exchange traded funds (ETFs) continue to be the subject of srutiny. When will it end?
This summer, both FINRA and the Securities and Exchange Commission (SEC) weighed in with their thoughts on these controversial funds and ultimately declared that investors should seek the advice of an investment professional who understands how these funds work. The agencies also took care to note that the ETFs need to be more closely monitored than their plain-vanilla brethren. (Read their statement here).
That’s the end of it, right? Not so fast.
Since then, ProShares was hit with a lawsuit regarding the UltraShort Real Estate (NYSEArca: SRS), while Direxion was hit with a suit that focuses on the performance of the Financial Bear 3X Shares (NYSEArca: FAZ). (How leveraged and inverse ETFs work).