Preamble
Exchange traded funds, at their onset, provided new and valuable ingress for investors. Daily liquidity is an additive feature for investors, and the financial instruments made access to passive market exposures attainable at low expense. Some of the larger, and broader-based ETFs still provide that utility. However, the more than 500 net new ETFs created over the last five years have altered the industry's value proposition, replacing inexpensive access with thematic or sovereign speculation, often with leverage.
Cocktail party conversations have been a financial industry barometer for many years. Boasts can be informative regarding investor sentiment. We imagine the cocktail party conversation today being something like this:
"I'm long the Direxion Daily Financial Bull 3X Shares ETF and the Deutsche X-trackers MSCI Europe Hedged Equity ETF, but I'm offsetting those positions with the ProShares Ultrashort Dow 30 ETF.
What do you own?"
"I own Amazon."
"Oh, ****, I need…