BlackRock Inc. (BLK)’s Laurence D. Fink oversees the world’s biggest exchange-traded fund lineup. Fink says, “BlackRock would never do a leveraged ETF and he doesn’t understand why the U.S. Securities and Exchange Commission allows them to operate.”
Becoming increasingly complex as firms try to appeal to a more diverse base of investors, ETF’s have turned into one of the most popular investing vehicles over the past decade. Leveraged ETF’s use swaps or derivatives to try to amplify daily index return, while the majority of ETF’s mimic indexes. Leveraged and inverse ETFs have come under scrutiny, the SEC warned brokers and investors that the vehicles weren’t appropriate for long-term investors, over several issues since 2009.