BlackRock’s Fink Attacks Societe Generale Over ETF Risks

Laurence D. Fink, chief executive officer of BlackRock Inc., stepped up his criticism of some exchange-traded funds such as those provided by Societe Generale SA, saying he didn’t want them to damage the industry.

So-called synthetic ETFs, offered by firms including Societe Generale’s Lyxor Asset Management and Deutsche Bank AG, introduce a layer of complexity and counterparty risk that investors may not be aware of, Fink said yesterday. Synthetic funds generate returns through derivatives contracts rather than owning underlying securities as traditional ETFs do.