Here Comes the SEC: How Much Leverage Do Mutual Funds Have?
By Tom Steinert-Threlkeld
Published September 09 2011 Securities Technology Monitor
The question is central to the regulation of uses of derivative securities by mutual funds that the SEC on August 31 opened to public comment. Many investors do not realize, chairman Mary L. Schapiro points out, that mutual fund managers, like other asset managers, use options, futures, and debt-based instruments not just as ways to hedge risks but to amplify returns. That is, gain leverage.
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