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Displaying 10 out of 19 results for "Inverse ETF".

Ohio Division of Securities, In the Matter of Timothy K. Fife - Ohio IA Registration to be Revoked

In February 2016, after evidentiary hearings, the Hearing Examiner recommended that Timothy Fife's investment adviser representative registration be revoked. The Report and Recommendation is available on our website. Fife's registration is being revoked because he provided investment advice and initiated securities transactions while not licensed in Ohio and because he recommended the unsuitable purchase and holding for extended periods of time of leveraged and inverse ETFs. Dr. McCann ...

FINRA Enforcement Actions: Month in Review

APRIL 2014 SELECTED FINRA ENFORCEMENT ACTIONS

FIRMS FINED

The Huntington Investment Company (CRD #16986, Columbus, Ohio)

The Huntington Investment Company consented to a $25,000 fine and censure. The firm consented to an entry of "findings that it failed to provide notice to the MSRB via the Electronic Municipal Market Access System (EMMA) that no preliminary official statements or official statements were to be prepared for bond anticipation note offerings in which the firm participated."...

SEC Examiniation Priorities 2014

The Securities and Exchange Commission (SEC) senior staff recently announced their 2014 examination priorities . The national examination program will be focusing on fraud detection and prevention, corporate governance, and registrants that serve as both a broker-dealer and investment adviser.

SEC staff also plans to undertake initiatives that examine the rollover of retirement vehicles during employment transitions or near retirement. In particular, the staff is concerned about misleading...

FINRA Action Against JP Turner for Unsuitable Leveraged ETF Sales

Last Thursday, FINRA ordered JP Turner, an Atlanta-based broker-dealer, to pay restitution related to sales of leveraged and inverse exchange-traded funds (ETFs) and excessive mutual fund switching. The total restitution to 84 customers totaled over $700,000.

Leveraged and inverse ETFs are extremely complex investments, that are designed for professional traders and are generally considered unsuitable for buy-and-hold investors. One fundamental issue with leveraged and inverse ETFs is that...

Just How Risky Are Leveraged and Inverse ETFs?

Leveraged and inverse exchange-traded funds (ETFs) are some of the most volatile securities traded in public markets. They are designed to track a specific index, except multiplying daily return of the index by a positive (leveraged) or negative (inverse leveraged) factor. The 'daily' part is important: leveraged and inverse ETFs do not track the leveraged or inverse return of the index for any period longer than a single day due to portfolio rebalancing. You can find more details about...

Massachusetts Fines Five Brokerage Firms for Sale of Non-Traded REITs

Secretary of the Commonwealth of Massachusetts William Galvin, who has previously come out swinging on behalf of investors in both warehoused CLOs as well as leveraged and inverse ETFs, announced yesterday that the state has settled with five independent brokerage firms regarding improper sales of non-traded REITs. Non-traded REITs are pooled real estate investments that have become notorious for high fees, lack of liquidity, and numerous potential conflicts of interest, as we detail in our...

SEC Examination Priorities 2013

Last week, the Securities and Exchange Commission announced their examination priorities for 2013 "to communicate with investors and registrants about areas that are perceived by the staff to have heightened risk, and to support the SEC's mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation."

For those that are unfamiliar, SEC staff conducts examinations of SEC registrants through their regional offices and headquarters

to determine...

SLCG Research: Volatility Smiles from Leveraged ETF Options

Leveraged ETFs are a perennial subject on our blog. I thought I'd take this opportunity to highlight a recent research project entitled "Crooked Volatility Smiles: Evidence from Leveraged and Inverse ETF Options" that I recently completed with my colleagues Geng Deng, Craig McCann and Mike Yan.

While studying options data on leveraged and inverse ETFs, we began to notice a pattern such that deep-in-the-money call options -- contacts whose strike price is well above the current spot price --...

Derivatives in Active ETFs

Over two and a half years ago, the SEC initiated a moratorium on approvals for new ETFs that made extensive use of derivatives such as options and futures contracts. Much of the concern at that time was that derivatives-based ETFs, particularly leveraged, inverse, and futures-based ETFs may not have investor protections or oversight commensurate with their level of risk. Regular readers of this blog know that we have spent a good deal of time discussing those issues in addition to our ...

Mutual Funds Holding Leveraged and Inverse Leveraged ETFs

While looking through recent SEC filings, an updated prospectus happened to catch our eye. The prospectus offers updated information concerning the investment strategy and details of two mutual funds: USFS Funds Limited Duration Government Fund (USLDX) and USFS Funds Tactical Asset Allocation Fund (USFSX).

The fund management company -- Pennant Management, Inc. -- states in this prospectus that "[USFSX] may invest up to 33% of its assets in leveraged ETFs and inverse ETFs, up to 10% of its...

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