ETFs and the leverage conundrum

  These products, however, are seen by many as short-term trading vehicles only suitable for sophisticated investors able to frequently monitor markets. The UK’s Financial Services Authority has gone as far as to warn leveraged ETFs are ‘generally unsuitable’ for the retail market, putting them on a par with complicated structured products. The industry regulator has even proposed publishing a list of products – potentially including leveraged ETFs – to be considered unfit for retail investors from the outset. Concern largely stems from the fact leveraged long and short product...