Subject: S7-24-15/ Leveraged ETF's and ETN's
From: Mike Leach

Feb. 15, 2020


I think that these leveraged vehicles should be allowed but the term "wasting asset" thoroughly explained.  This should be accomplished by way of graphically charting the effects of how interest carrying costs and the underlying effect of reestablishing expiring commodity future positions either at successively higher or lower prices can negatively impact anticipated returns.  Also, the risk of fund closure owing to lack of retail interest should be highlighted, as well as the risk to return from sudden ups and downs in interest rates.  Otherwise, my feeling is that these products should be left unregulated.  Full disclosure is important in a format that the layman can comprehend, though.  I do oppose interjecting a brokerage company or financial adviser into the process.  Let the buyer know and beware and forget the adviser and his judgment.  Once you put a rule onto these people they overreact, fearing lawsuits, and misinterpret.  They tend to twist client decisions in the direction of their own self-serving puposes..  They have no business in the middle of our lives unless we want them there and solicit their counsel.   
I actually own several of these products.  I like them.   
Mike Leach