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Experts Are Lining Up To Warn About The Leveraged ETFs That Could 'Blow Up'...

BlackRock Inc Chief Executive Larry Fink this week dropped a stink bomb on a small corner of the $2.5 trillion global market for exchange-traded funds.

Fink, who runs the world's largest asset manager and ETF provider, said structural problems with leveraged ETFs have the potential to "blow up the whole industry one day." Sponsors of leveraged ETFs and related products, which make up only about $60 billion of global industry assets, called his remarks an exaggeration.

Leveraged ETFs use derivatives and debt in an attempt to enhance returns - often by two or three times - that an investor would receive from putting money in stocks, bonds or other financial instruments. The only problem: if the underlying securities or indexes drop, the losses can be fast and heavy.

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