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Re: None

Tuesday, 05/01/2012 2:09:22 PM

Tuesday, May 01, 2012 2:09:22 PM

Post# of 47017
Re leveraged funds. I'm with Toof in being skeptical about these even for AIM. Here's the warning from Morningstar on these:

ProShares Ultra S&P500 attempts to provide 2 times the daily return of the S&P 500. Leveraged funds are expensive and extremely risky, so they are best left to speculative traders or hedgers that have the desire to monitor and trade their positions daily. While it may be tempting to use a leveraged or inverse ETF to capitalize on an investing idea or as a hedge, investors would probably be better served by using unleveraged products or adjusting their asset allocation. The mathematics of compound interest make volatility a hidden cost to this fund beyond the already high 0.92% expense ratio. The SEC is examining the need for additional investor protections for leveraged and inverse exchange-traded funds and has put a temporary halt to the issuance of new derivatives-based ETFs. In addition, FINRA has cautioned its broker members on the sale of leveraged ETFs.

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