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More mutual fund companies are now jumping on the exchanged-traded fund bandwagon.

While some managers have been sticking to ETFs designed to passively mimic an index or commodity moves for their portfolios, it looks like the more controversial leveraged ETFs are also gaining attention.

AGF Management Ltd. recently got approval from the Ontario Securities Commission to invest up to 10 per cent of its funds in leveraged bull ETFs and leveraged bear ETFs.

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The company can now also buy simply inverse or so-called short ETFs as well as gold and leveraged gold ETFs. See OSC decision.

In Canada, the provider of the leveraged and inverse ETFs is BetaPro Management Inc. However, AGF can purchase such ETFs listed in both Canada and the United States. AGF will be required to disclose this decision known as an "exemptive relief" in a fund's prospectus.

"The underlying ETFs are attractive investments for the funds as they provide an efficient and cost effective means of achieving diversification and exposure," the OSC noted in its decision.

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