It makes no sense to me for regulators to restrict access to leveraged and inverse funds to accredited investors. I am an accredited investor for many purposes but earlier in my investing career, I was well aware of the risks of leverage but because such funds were rare, I was unable to access them without incurring substantial margin debt. Similarly, investors need access to inverse funds when the risks of market declines are high as they presently are. This enables some hedging of my portfolio without liquidating long investments, which I am holding for long term investment purposes. Inverse funds provide a useful hedging technique, especially when combined with leverage.
Anthony Beirne Comment On Regulatory Notice 22-08
It makes no sense to me for regulators to restrict access to leveraged and inverse funds to accredited investors. I am an accredited investor for many purposes but earlier in my investing career, I was well aware of the risks of leverage but because such funds were rare, I was unable to access them without incurring substantial margin debt. Similarly, investors need access to inverse funds when the risks of market declines are high as they presently are. This enables some hedging of my portfolio without liquidating long investments, which I am holding for long term investment purposes. Inverse funds provide a useful hedging technique, especially when combined with leverage.