The Traderszone Network

Published in TZ Latest News 31 May, 2014 by The TZ Newswire Staff

BlackRock’s Fink jolts ETF business with ‘blow up’ warning

Fink, who runs the world’s largest asset manager and ETF provider, said structural problems with leveraged ETFs have the potential to “blow up the whole industry one day.” Sponsors of leveraged ETFs and related products, which make up only about $60 billion of global industry assets, called his remarks an exaggeration. Leveraged ETFs use derivatives and debt in an attempt to enhance returns – often by two or three times – that an investor would receive from putting money in stocks, bonds or other financial instruments.

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