Key Takeaways
- • Ripple Prime, the prime brokerage arm of crypto payments firm Ripple, is now financing leveraged single-stock ETFs.
- • Leveraged ETFs pay a financing fee, usually through total return swaps, to the firms that supply their leverage, in addition to published management fees.
- • These financing fees are rarely disclosed, which makes the full cost of leveraged ETF products difficult for investors to assess.
- • One Tradr fund is cited in coverage of this segment.
Summary
Ripple Prime, the prime brokerage arm of crypto payments firm Ripple, has moved into financing leveraged single-stock ETFs, extending its services into a segment of the exchange-traded fund market that relies on swap-based leverage.
Beyond their published management fees, leveraged ETFs typically pay a financing fee to the firms that supply their leverage, usually through total return swaps. This fee is rarely disclosed, so the all-in cost of leverage is not always visible to investors. The central question in the coverage is who is actually earning money from these products.
One Tradr fund is referenced as an example of the leveraged single-stock structures involved in this market.
Beyond their published management fees, leveraged ETFs typically pay a financing fee to the firms that supply their leverage, usually through total return swaps. This fee is rarely disclosed, so the all-in cost of leverage is not always visible to investors. The central question in the coverage is who is actually earning money from these products.
One Tradr fund is referenced as an example of the leveraged single-stock structures involved in this market.
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