Finra Warns About Inverse ETFs

Finra filed an Investor Alert warning investors and reminding brokers and RIA’s that inverse ETF’s that offer leverage are very complex and are typically unsuitable for any retail investor who intends on holding them beyond one day.

Inverse ETF’s are designed to perform inversely to an index or a benchmark that they track. They can be useful in sophisticated trading strategies, but are very difficult for everyday investors to understand. The Investor Alert focuses on risk, cost and tax consequences. Here is a link to it: http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/MutualFunds/P119778