Demand for high-risk leveraged and inverse single-stock exchange-traded funds in the US may be losing some momentum after a rapid expansion in new products.
A volatile bull market has encouraged investors to seek products capable of magnifying daily moves in some of the market's most popular and volatile stocks. The surge in speculative offerings has been substantial, with leveraged products accounting for as much as half of all new ETF launches in June alone.
However, ****** ysts are increasingly questioning whether the pace of expansion can continue as competition intensifies and ****** ets become concentrated among a relatively small number of successful funds.
"The market for these is saturated and there's only so much money out there chasing this kind of product," said Morningstar ****** yst Daniel Sotiroff. "A few firms at the top end up commanding the lion's share of the money, and then there's a long tail of also-rans who are struggling to attract ****** ets."
ETF industry ****** ysts, including Sotiroff and Cerulli ****** ociates, generally consider between $50 million and $100 million in ****** ets within a fund's first one or two years as an important benchmark for long-term viability. Funds that remain below that range can find it more difficult for their sponsors to cover operating costs.
#volatile #market
A volatile bull market has encouraged investors to seek products capable of magnifying daily moves in some of the market's most popular and volatile stocks. The surge in speculative offerings has been substantial, with leveraged products accounting for as much as half of all new ETF launches in June alone.
However, ****** ysts are increasingly questioning whether the pace of expansion can continue as competition intensifies and ****** ets become concentrated among a relatively small number of successful funds.
"The market for these is saturated and there's only so much money out there chasing this kind of product," said Morningstar ****** yst Daniel Sotiroff. "A few firms at the top end up commanding the lion's share of the money, and then there's a long tail of also-rans who are struggling to attract ****** ets."
ETF industry ****** ysts, including Sotiroff and Cerulli ****** ociates, generally consider between $50 million and $100 million in ****** ets within a fund's first one or two years as an important benchmark for long-term viability. Funds that remain below that range can find it more difficult for their sponsors to cover operating costs.
#volatile #market
2 days ago
