Andrew Mathieson, founder and managing member of Fairview Capital Investment Management LLC, comments that he “couldn’t possibly justify putting clients’ money” into these new extreme ETFs “because they’re brand new, not tested, and [he doesn’t]know what’s in them.”
The Securities and Exchange Commission (SEC) has already moved in and deferred approval of new ETFs that use derivatives as the providers review whether there are too much leverage and complexity in the offerings aimed at retail investors.
Assets under ETFs have more than doubled to $1.1 trillion since 2005, and with 833 new funds in the works, the market could well increase another 20% to 30% this year. It’s safe to say that ETFs are far from a fad. [Leveraged and Inverse ETFs Have Their Day.]
For more information on ETFs, visit our ETF 101 category. To see the CNBC Global Bear portfolio, visit their Model ETF Portfolios homepage.
Max Chen contributed to this article.