If Rydex, IShares goes broke what happens with the clients money?

Discussion in 'Trading' started by Daal, Nov 30, 2006.

  1. Daal


    I know thats unlikely, impossible, will never happen, etc.
    But I would like to know just in case
  2. gnome


    It cannot "go broke"... not even an issue.

    The iShares are a derivative of the underlying securities they own.

    There is ZERO chance, "one day I wake up and it's all gone"...

    However, the leveraged Nasdaq/Tech funds lost >95% of their value in the tech crash of '00-'03, but it wasn't an overnight disappearance..... rather, a very fast downhill slide.

    The same could happen again, but it wouldn't be a case of "last night it was $50/share, today it's $0 because of...."
  3. Daal


    Say the company who manages it files chapter seven, who gets the money first
  4. gnome


    The value of the shares is represented by the value of the underlying securities. If the management company goes bust, it will have zero affect on the value of shares. By regulation, management company assets and shareholder assets are segregated.
  5. Daal


    Ah, thanks. Where I can read more about this regulation?