Leveraged ETFs May 'Blow Up' Industry

BlackRock CEO warns of structural market risks created by funds with embedded leverage.

BlackRock Inc.’s Laurence D. Fink, who oversees the world’s biggest exchange-traded fund (ETF) lineup, said leveraged ETFs are a structural problem and have the potential to “blow up” the industry.

“BlackRock would never do a leveraged ETF,” Fink said in a question-and-answer session with Deutsche Bank AG co-chairman Anshu Jain today in New York. Fink said he doesn’t understand why the U.S. Securities and Exchange Commission (SEC) allows them to operate.

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