At least four U.S. brokerage firms including UBS, Edward Jones, and Ameriprise have decided not to sell leveraged exchange traded funds to retail clients a month after the Financial Industry Regulatory Authority Inc. warned brokers that they “typically are unsuitable for retail investors” who hold them longer than a day.
UBS Wealth Management Americas announced that it “has suspended purchases of leveraged and inverse ETFs to their clients, effective immediately, as the short-term nature of these securities is generally inconsistent with the long-term view of investing that UBS advocates when building client portfolios. In addition, recent regulatory guidance on leveraged and inverse ETFs reinforces the short-term nature of these products, particularly in volatile markets.”
FAIR Canada’s update on the hazards of leveraged, inverse and commodity ETFs can be found here.
