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New ETF launches are getting meta.
Roundhill launched a new leveraged product last week that targets twice the daily performance of its own computer memory fund, the Roundhill Memory ETF (DRAM), which itself has become one of the most successful launches of all time. The new T-REX 2X Long DRAM Daily Target ETF (RAM) is one of the latest in the leveraged category, which has brought in hundreds of billions in ***** ets since the start of the year and was, according to Morningstar, responsible for over 300 new product launches last year. But why so many new leveraged funds, and why now? The answer has several parts, one being that they tend to be more lucrative for issuers than investors, said Dan Sotiroff, ***** ociate director at Morningstar.
"On the one hand, you've got the clients that are gambling with this stuff, they want a quick hit and a quick win," Sotiroff said. "On the other side, you have ***** et managers who are going to blast 50 or 60 of these out there all at once, betting that one or two of them become wildly successful. The success of those one or two more or less subsidizes the cost of doing the 50 or 60, and they're justified in doing that from a business perspective, because they still make money at the end of the day."
Sign up for The Daily Upside at no cost for premium ***** ysis on all your favorite stocks.
New ETF launches are getting meta.
Roundhill launched a new leveraged product last week that targets twice the daily performance of its own computer memory fund, the Roundhill Memory ETF (DRAM), which itself has become one of the most successful launches of all time. The new T-REX 2X Long DRAM Daily Target ETF (RAM) is one of the latest in the leveraged category, which has brought in hundreds of billions in ***** ets since the start of the year and was, according to Morningstar, responsible for over 300 new product launches last year. But why so many new leveraged funds, and why now? The answer has several parts, one being that they tend to be more lucrative for issuers than investors, said Dan Sotiroff, ***** ociate director at Morningstar.
"On the one hand, you've got the clients that are gambling with this stuff, they want a quick hit and a quick win," Sotiroff said. "On the other side, you have ***** et managers who are going to blast 50 or 60 of these out there all at once, betting that one or two of them become wildly successful. The success of those one or two more or less subsidizes the cost of doing the 50 or 60, and they're justified in doing that from a business perspective, because they still make money at the end of the day."
Sign up for The Daily Upside at no cost for premium ***** ysis on all your favorite stocks.
2 months ago
