Leveraged funds are a great tool for building wealth, especially for those of us without large amounts of capital to begin with.
There is plenty of peer reviewed academic research that using leverage when you're young offers increased risk adjusted returns.
There is also a MAJOR logistical issue in implementing this ban that would RUIN many people financially. Leveraged ETFs are volatile. Due to the recent downtrend, the account balance of someone using a leveraged ETF is much lower than it was at the beginning of the year. This is simply due to the volatility. Once the market returns (as it always has and most likely will in the future), the leveraged product will produce better returns.
So in effect what you're doing is forcing people to sell their assets at the absolute worst time, causing potentially unrecoverable financial losses.
I understand that leveraged products can pose greater risks to people, but you must address this concern in a different way. Otherwise you will cause more pain and suffering than you can imagine. I'm talking millions of people in MAJOR financial pain for no fault of their own.
Please do NOT pass this into law. It would be catastrophic for millions of families across this country and around the world. Not to mention any knock on effects throughout the economy.
Sean Pullman Comment On Regulatory Notice 22-08
Leveraged funds are a great tool for building wealth, especially for those of us without large amounts of capital to begin with.
There is plenty of peer reviewed academic research that using leverage when you're young offers increased risk adjusted returns.
There is also a MAJOR logistical issue in implementing this ban that would RUIN many people financially. Leveraged ETFs are volatile. Due to the recent downtrend, the account balance of someone using a leveraged ETF is much lower than it was at the beginning of the year. This is simply due to the volatility. Once the market returns (as it always has and most likely will in the future), the leveraged product will produce better returns.
So in effect what you're doing is forcing people to sell their assets at the absolute worst time, causing potentially unrecoverable financial losses.
I understand that leveraged products can pose greater risks to people, but you must address this concern in a different way. Otherwise you will cause more pain and suffering than you can imagine. I'm talking millions of people in MAJOR financial pain for no fault of their own.
Please do NOT pass this into law. It would be catastrophic for millions of families across this country and around the world. Not to mention any knock on effects throughout the economy.