It is easy to understand that, in the long run, markets go up and that, therefore, an inverse fund that shorts an index is not a profitable long-term investment.
But it is also obvious it can be used to hedge long investments and limit the impact of a catastrophic downturn. And since it is related to an index, it is much less volatile and risky than many individual stocks.
Therefore, I don't see any reason to regulate its use more that that of any regular stock.
I do not have any comment to make on leveraged funds.
Mr. Sater Comment On Regulatory Notice 22-08
It is easy to understand that, in the long run, markets go up and that, therefore, an inverse fund that shorts an index is not a profitable long-term investment.
But it is also obvious it can be used to hedge long investments and limit the impact of a catastrophic downturn. And since it is related to an index, it is much less volatile and risky than many individual stocks.
Therefore, I don't see any reason to regulate its use more that that of any regular stock.
I do not have any comment to make on leveraged funds.