Fri, September 25, 2009
Further Criticism of MacroShares UMM and DMM
Don Dion, writing in TheStreet.com, has included UMM and DMM on his list of the "10 Most Dangerous ETFs." Technically, they're not ETFs, but that's a minor quibble. Going beyond the criticisms I offered of MacroShares Major Metro Housing Up (UMM) and Major Metro Housing Down (DMM), Dion comments:
“Perhaps the most dangerous aspect of the funds is that they are designed as paired trusts and pledge assets to each other over time. Generally, fund issuers create additional shares of a fund if investor demand peaks and assets pour in.... The failure of MacroShares’ oil funds following the 2008 spike in oil prices does not bode well for UMM and DMM, the last surviving funds from this issuer. Investors should avoid these unconventional leveraged funds and their triple bets.”
RELATED POSTS:
MacroShares UMM and DMM Let You Hedge House Prices, But Should You?
No Huge Surprise: MacroShares UMM and DMM Will Terminate Early