Leveraged ETFs drive record $190 billion global equity fund inflows
Updated
Updated · CNBC · May 7
Leveraged ETFs drive record $190 billion global equity fund inflows
8 articles · Updated · CNBC · May 7
JPMorgan said about $90 billion of April inflows became a record $190 billion after adding an estimated $100 billion leveraged-ETF rebalancing flow, as the S&P 500 posted its best month in over five years.
Strategists led by Nikolaos Panigirtzoglou said the end-of-day, price-insensitive rebalancing likely amplified April's rally and helped push stocks to new highs.
The bank warned the same mechanics can magnify losses in a downturn, while popular leveraged ETFs also carry high risk, daily resets and relatively high fees.
A record $100 billion from leveraged ETFs fueled April's rally. What happens when this massive tide turns?
As leveraged ETFs amplify market swings, are regulators prepared for the systemic risks they could trigger?