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iShares MSCI EMERGING MK ETF (EEM) 40.65 -$0.17 (-0.42%) 02:40AM (15 mins delay)

September Performance Busts Leveraged ETF Myth

Oct 07, 2009 - 5:28 AM EDT

Michael Johnston submits:

Over the last year, leveraged ETFs have been the subject of intense scrutiny from a number of parties, including regulatory agencies, state governments, broker-dealers, individual investors, and even class action lawyers. While several aspects of leveraged ETFs have been thoroughly analyzed and debated, perhaps no issue has drawn more attention than the effects of compounding returns when held for multiple trading sessions.

NASD Executive Offices Because most leveraged ETFs seek to provide amplified returns on a daily basis, they reset their exposure to the underlying benchmark on a daily basis.

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Source: Seeking Alpha (Oct 07, 2009 - 5:28 AM EDT)