SEC, FINRA Warn Investors Of Fund 'Minefield'

Law360, New York (August 19, 2009, 2:43 PM EDT) -- U.S. securities regulators have cautioned retail investors to look before they leap into leveraged and inverse exchange-traded funds, highlighting the long-term risks associated with the complex financial products.

The alert — issued Tuesday by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority — advises investors to consider leveraged and inverse ETFs only if they are well-versed on the risks.

ETFs are generally registered investment companies, whose shares represent a stake in a portfolio of securities, although some ETFs that invest in commodities...
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