The lure of leveraged funds in China

The lure of leverage


Regulators in the US and Europe have expressed concern about the suitability for retail investors of leveraged exchange-traded funds (ETFs) with features such as daily leverage resets, which can lead to a compounding of risk. But in China, retail investors are already actively trading hybrid leveraged ETF-like, asset-backed security products on exchange. These instruments appear to have attracted much less of a supervisory backlash, although new leverage rules are set for introduction. &lsquo