The lure of leveraged funds in China

Lof out loud

shenzhen-china
Shenzhen, China

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, though new leverage rules are set for introduction.

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