I would urge you not to place any new restrictions on leveraged ETF products. I am a retail investor and am interested in investing in these products for a small part of my portfolio as part of a high risk / high reward investment. Leveraged strategies have been used by large institutional and high net worth investors for some time and leveraged ETFs democratize access to them. It isn't fair to restrict access to leveraged ETFs while continuing to allow institutions or large individual investors to invest with leverage using other methods.
These leveraged ETFs can go to zero but the individual investor can't lose more than their initial investment. This makes them safer compared to other types of leveraged investments such as margin loans where you can end up losing more money than your initial investment.
Individual stocks can also go to zero but no one has proposed that small investors should be unable to buy an individual stock. Leveraged ETFs should continue to be available for purchase in 401K and IRA plans for the motivated investor without any restrictions on their holding period.
Gregory Ruttan Comment On Regulatory Notice 22-08
I would urge you not to place any new restrictions on leveraged ETF products. I am a retail investor and am interested in investing in these products for a small part of my portfolio as part of a high risk / high reward investment. Leveraged strategies have been used by large institutional and high net worth investors for some time and leveraged ETFs democratize access to them. It isn't fair to restrict access to leveraged ETFs while continuing to allow institutions or large individual investors to invest with leverage using other methods.
These leveraged ETFs can go to zero but the individual investor can't lose more than their initial investment. This makes them safer compared to other types of leveraged investments such as margin loans where you can end up losing more money than your initial investment.
Individual stocks can also go to zero but no one has proposed that small investors should be unable to buy an individual stock. Leveraged ETFs should continue to be available for purchase in 401K and IRA plans for the motivated investor without any restrictions on their holding period.