Skip to main content


Representing Individual, High Net Worth & Institutional Investors

Office in Indiana


Home > Blog > SEC & FINRA Issue Warning on Leveraged and Inverse ETFs

SEC & FINRA Issue Warning on Leveraged and Inverse ETFs

FINRA and the SEC want to alert individual investors about performance confusion on the objectives of leveraged and inverse ETFs. Investors should be aware that performance of ETFs over a period longer than one day can differ significantly from their stated daily performance objectives.

The best form of investor protection is to clearly understand these types of investments before dishing out your hard earned money. Start by reading the prospectus, which will provide detailed information on the ETFs’ investment objectives, principal investment strategies, risks, and costs. The SEC’s EDGAR system, as well as search engines, can help you locate a specific ETF prospectus. You can also find the prospectuses on the websites of the financial firms that issue a given ETF, as well as through your broker.

Consider pursuing the advice of an investment professional. Work with someone who understands your investment goals and tolerance for risk. Your investment professional should recognize these complex products, be able to explain if or how they fit your personal goals, and be willing to monitor your investment.

As with all investments, it pays to do your own homework. Only invest if you are confident the product can help you meet your investment objectives and you are knowledgeable and comfortable with the risks associated with these specialized ETFs.

Take a look at the alert issued by the SEC for more information and for real-life examples that illustrate how returns on a leveraged or inverse ETFs over longer periods can differ significantly.

Comments are closed.

« Back to Blog

Top of Page