Karen Langley
speaker
146 appearances
4 recordings
1 series
first heard Jul 2020
last heard Dec 2024
Karen Langley’s voice in public audio — every appearance, attributed to the second.
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Appearances
So the new set of ETFs are designed as ways to make bets, often big bets, on individual high-profile stocks.
And the key here is that these ETFs are tied to the daily performance of the stocks that they track, as opposed to tracking the performance over a longer stretch of time.
Thanks for having me.
Sure.
So ETFs are exchange-traded funds.
They're bundles of securities that trade on exchanges with shares that can be bought or sold like stocks.
The most well-known kind of ETFs try to match the performance of stock indexes like the S&P 500, although there are also ETFs that track prices of bonds or commodities and even ETFs that pick stocks instead of trying to just track the broad market.
Investors also turn to ETFs when they want exposure to a sector or industry within the economy because some ETFs track companies in those areas.
So those give investors the chance to invest in a group of stocks with some kind of theme or connection rather than investing in the broad market as a whole.
So the new set of ETFs that was launched last week by a company called Access Investments are designed as ways to make bets, often big bets, on individual high profile stocks.
And the key here is that these ETFs are tied to the daily performance of the stocks that they track.
as opposed to tracking the performance over a longer stretch of time.
So these new ones are linked to how shares of PayPal, Nike, Pfizer, Nvidia do.
And the key here is that these funds are supposed to magnify the daily returns of those stocks, either in the same direction as the stock performs that day, or in some cases in the opposite direction.
One of the ETFs, for example, is supposed to give investors double the daily performance of Nike shares.
Another one is meant to deliver opposite the daily performance of Tesla shares, so that if Tesla fell by a certain amount on a given day, the ETF is designed to rise by that amount.
So a commissioner at the SEC cautions that investors should be aware that because of how these funds work, their performance over longer periods of time than a day could look very different than investors might expect if they were to just look at how the underlying stock did over that same time.
And then the head of the SEC's Office of Investor Education and Advocacy also warns that since the funds are based on individual stocks,
They don't have the benefit of diversification that you would get in funds that are based on a bunch of different stocks.
Investors have shown they really have an appetite for riskier investments.
Showing 41–60 of 146 · page 3 of 8
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