Exchange-traded funds offer unique risks

Easy to trade does not mean free of risk

For some investors, exchange-traded funds (ETFs) are a dream come true. They are accessible, offer relatively cheap transaction costs and come with nearly any feature a modern trader could want. There are leveraged ETFs, bear-market ETFs and exposure in everything from real estate to commodities.

Even better, right now, significant funds are flowing into ETFs, creating liquidity and encouraging those who offer them to get even more creative with product specifications.

However, rewards don't come without risk. Never have, never will. This article in The Wall Street Journal discusses the potential downsides of these powerful and popular investment vehicles.

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