BlackRock head Larry Fink says leveraged ETFs threaten the market’s structural stability and could “blow up” the funds industry, Bloomberg reports.
Fink says BlackRock would never sell a leveraged ETF and he doesn’t think the U.S. Securities and Exchange Commission should let them exist.
Traditional ETFs track indexes and offer lower fees than mutual funds because they require less portfolio oversight. As they’ve gained in popularity, firms have introduced more complicated versions, including products with leverage. Fink says these should be more closely supervised.
BlackRock is lobbying for regulators to create categories of ETFs with clear labeling and risk profiles.
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