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Leverage in single-stock ETFs raises risk concerns

CNBC Markets says the ETF boom has shifted from low-cost, tax efficient core index funds toward more complex single stock and leveraged structures.

Reported · Written up by our desk · ETFs

The ETF market is moving beyond the original low cost, tax efficient focus of broad index funds, and leverage is starting to raise concerns, according to CNBC Markets.

The outlet points to the growth of single stock ETFs as a key factor, arguing that these products can increase risk compared with traditional core index exposure.

CNBC Markets adds that leverage appears to be getting pushed further than the market can comfortably handle, using SK Hynix as a recent example.

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