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Boost ETP, A WisdomTree Company, is an independent award winning ETP provider, one of few independent providers of specialised Exchange Traded Products (ETPs) in the European market and is the first to focus on Short and Leverage (Long) ETPs. Our focus is on providing all the educational and... More
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  • Equity Investors Were Bullish In October, As Global Short & Leverage ETF / ETP Assets Up 15% In 2013 To $52bn YTD
    • Global S&L AUM remains at around $52bn, up nearly $7bn this year
    • Of the $34.4bn in S&L equity ETPs, 59% is long, up from 54% in August. S&L equity inflows totalled $865m in October
    • Fixed income investors remain unanimously bearish
    • Commodity ETP investors were bullish on oil and natural gas, while remaining indecisive on gold and silver in October
    • Trading volume in BOOST ETPs up 5x since start of September with record inflows into a variety of indices and leverage factors


    BOOST ETP, the award winning and independent exchange-traded product (NYSE:ETP) provider, has released its Global Short & Leverage ETF/ETP report for October 2013. Global Short and Leveraged (S&L) ETP assets have risen by $6.6bn (15%) in the first ten months of 2013 to $51.5bn, as investors continue to increase their use of S&L ETPs. Demand for S&L ETPs was also supported by volumes in BOOST ETPs having risen by 5x since early September.

    Of the $51.1bn of AUM currently held by S&L ETPs globally:

    • $34.4bn is held in S&L equity ETPs. In October, S&L equity ETPs experienced $865 million of inflows in October and $5 billion YTD
    • Equity ETPs: $4.5bn of AUM is held in S&L equity ETPs tracking Europe or European countries, of which 42% is held in long ETPs and 58% is held in short ETPs, with the largest positions in German ($1.2 billion), broad European ($760 million), Italian ($695 million) and French ($614 million) equities
    • Fixed income ETPs: $9.4bn is held in S&L fixed income ETPs, of which 98% is held in short ETPs, which is consistent with a strong expectation of rising interest rates
    • Commodity ETPs: Currently there is $4.5 billion of AUM held in S&L commodity ETPs of which 56% is held in long commodity ETPs and 44% is held in short commodity ETP, with the highest net inflows going to natural gas ($135 million) and silver ($10 million), while gold and oil experienced outflows of $27 million and $26 million respectively

    BOOST ETP is also experiencing rising investor demand for its robust and transparent S&L ETPs. BOOST ETP listed eight new 3x Short and 3x Leveraged ETPs on the Borsa Italiana for the first time on 31 October 2013. BOOST ETPs had a 6.1% market share in the ETP segment of Borsa Italiana's ETFPlus platform. Over recent weeks, BOOST has had record breaking inflows into 3x Leverage Oil, 3x Leverage Natural Gas, 3x Short FTSE MIB, 2x Short FTSE 100 and 1x Short FTSE 250. In total, there was $10m of inflows. November's trading volumes are up 5x (500%) compared to early September.

    BOOST offers a platform of Short and Leverage equity ETPs and commodity ETCs giving exposure to a wide variety of leverage factors ranging from -3x to +3x.

    Nik Bienkowski, Co-CEO of BOOST ETP, commented:

    "Equities continued their rise in October after a strong September with Boost LevDAX 3x Daily ETP (3DEL) returning 18.3% (in GBP) for October. October also saw the launch of 3x equity ETPs and 3x commodity ETCs on Borsa Italiana. Italian investors have already taken to short and leveraged ETPs. The most traded ETPs on Borsa Italiana are ETPs providing leverage exposure to the FTSE MIB and Natural Gas."

    "Global demand for S&L ETPs is continuing at a rapid pace in 2013, with Global AUM in Short and Leverage ETPs reaching $52 billion up $6.6 billion this year. Boost experienced a record breaking week last week with significant inflows and trading volumes across a wide range of indices and leverage factors from 1x Short FTSE 250 to 3x Leverage Oil. Boost ETPs are liquid, robust and transparent and as a result, investors are starting to take to the Short and Leverage offering from Boost ETP."

    Investors are increasingly using S&L ETPs for a variety of reasons. There is wider product availability, greater product knowledge from improved educational resources and increased demand for hedging tools and leveraged instruments. There is also a move towards independent, transparent and exchange traded instruments such as ETFs and ETPs. As a result of this increased usage and interest in S&L ETPs, BOOST recently launched a monthly Global Short & Leverage ETF / ETP Report and a Short & Leverage ETF / ETP Advisor Tool Kit.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: GLD, ETF
    Nov 26 6:31 AM | Link | Comment!
  • In Defence Of Short And Leveraged ETFs

    There has been much discussion recently over the Federal Reserve's Leveraged ETFs report writeen by Tugkan Tuzin.

    It appears to many that Mr Tuzun's main conclusion is that the daily rebalance of Short and Leverage (S&L) ETF which naturally occurs in the same direction in which the market is moving could trigger a 'cascade' reaction leading to a domino effect, potentially causing market crashes. Mr. Tuzun provocatively titles his paper "Are Leveraged and Inverse ETFs the New Portfolio Insurers?". The comparison with 'Portfolio Insurers' is clearly designed to grab attention rather than add anything to the analysis.

    Boost feels that the view taken and the conclusions reached by Mr. Tuzun are simplistic in approach and ignores the basics of how markets work and the facts related to S&L ETFs.

    First of all ETFs are essentially market access tools. They do not invent trading or investment strategies, but rather just give investors tools to use to express them. S&L ETFs also sit alongside many types of leveraged trading vehicles including prime brokerage accounts, futures, options, structured products, margin trading, OTC derivatives, CFDs/Spread Bets, covered warrants and so on. Interestingly the leverage factor employed by S&L ETFs is usually 2 or 3x the return of the index. This is an extremely low leverage compared to the leverage employed by some of the instruments listed above which can be up to 20 times.

    Secondly the global assets under management (AUM) of S&L ETFs is around $50bn. This is inconsequential compared to the $2 trillion of AUM in global ETFs, which is actually less than 10% of global AUM in mutual funds. This is further diluted by the fact that S&L ETFs tend to only give access to the most liquid underlying markets, such as the FTSE 100, Gold etc. and not across the broad range of illiquid exposures provided under the broader ETF and mutual funds markets. Some of these exposures can be less liquid than those tracked by S&L ETFs. Thirdly Mr Tuzun seems to claim that the end of day trading is a major contributory factor. Stock markets tend to see the majority of trading activity at the start and end of the day in a U curve shape. There is a huge amount of activity at the close and in the closing auctions on the various global exchanges. This is of course for a variety of investment and trading strategies. If anything, the close on an exchange is the point of the day when liquidity is highest and where leveraged ETF rebalancing is least likely to have an impact. Finally, Mr Tuzun fails to consider why some investors use S&L ETFs. Boost's clients very often use S&L ETPs in order to hedge their existing positions. Therefore the likelihood is that if S&L ETFs were not available these investors may be forced to employ more capital in essentially the same way as S&L ETFs do, use other hedging tools which need to be similarly rebalanced, or liquidate positions short term in sharp market movements even though they would prefer to hold them for the longer term, which could in itself could contribute to a "cascade effect". Other researchers also disagree with Mr Tuzun's conclusions. William J. Trainor (2010) (1) concludes that leveraged ETFs do not appear to have any substantial effect on the market. Credit Suisse published a paper in 2011 titled 'Leveraged ETF Rebalancing in Perspective' which concluded that "leveraged ETF rebalancing trades are unlikely to be the most influential factor in driving intraday swings into the close". There has been no significant changes to the AUM or structure of S&L ETFs which would have changed these earlier conclusions (2). We think the Tuzun paper is a head-line grabber and doesn't stand up to real world scrutiny. Given the size of the S&L ETF market globally and the strategies that investors employ when using them, we firmly believe the impact is minimal. S&L ETFs provide an important tool for investors to hedge their portfolios and protect their investment as well as an efficient way to gain exposure to a market and preserve valuable capital. When compared to other ways of gaining leverage or short exposure such as futures, options, CFDs, spread bets and structured products, S&L ETFs have some real benefits. Investors can't lose more than their initial investment; they don't need to complete complex derivative documentation; they trade on Exchange with multiple market makers; and counterparty risk is managed through a robust and transparent collateral processes. Sources1. William J. Trinaor, "Do Leveraged ETFS Increase Volatility", Technology and Investment, 2010, 1, 215-220 Published Online August 2010 (http://www.SciRP.org/journal/ti) 2. Global AUM in S&L ETFs was approximately $45bn at the end of 2010 and $51bn at the end of Q2 2013.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 28 10:08 AM | Link | Comment!
  • World's First FTSE 250 Short & Leverage ETP On The London Stock Exchange
    • World's first Short and Leveraged (S&L) FTSE 250 ETPs
    • New FTSE 100 Short and Leveraged ETPs with market beating expense ratios
    • Existing 3x Short and Leveraged FTSE 100 ETPs account for 80% of Boost trading volumes

    BOOST ETP the award winning and independent Exchange-Traded Product (NYSE:ETP) provider announced today that it has listed five new FTSE products in its range of equity Short and Leveraged ETPs, bringing the total number of equity ETPs to 17. BOOST listed its first set of S&L products, the first issuer to focus on 3x Short and 3x Leveraged ETPs, in December 2012.

    Demand for transparent S&L ETPs has increased over the past few years with global S&L ETP assets rising to just under $50bn, as many financial markets have trended sideways, resulting in volatile but poor long term returns.

    BOOST's list of new S&L ETPs tracking FTSE indices are:

    NEW Product NameLSE Code

    Boost FTSE 250 1x Short Daily ETP1MCS

    Boost FTSE 250 2x Leverage Daily ETP2MCL

    Boost FTSE 100 2x Leverage Daily ETP2UKL

    Boost FTSE 100 2x Short Daily ETP 2UKS

    Boost FTSE 100 1x Short Daily ETPSUK1

    Existing FTSE 100 S&L ETPs:

    CURRENT Product NameLSE Code

    Boost FTSE 100 3x Leverage Daily ETP3UKL

    Boost FTSE 100 3x Short Daily ETP3UKS

    BOOST ETP is the first issuer in the world to list FTSE 250 S&L ETPs, which will complement Boost's offering of S&L ETPs tracking the FTSE 100. Investors will now be able to trade UK large-cap or mid-cap on a short and leveraged basis in one simple trade.

    BOOST's three new S&L FTSE 100 ETPs will provide -1x, -2x and +2x exposures to the daily change in the FTSE 100 Index. The 3 new FTSE 100 products all have expense ratios significantly less than similar ETPs already available on the LSE. The current FTSE 100 products equate to approx. 80% of trading volumes for Boost.

    Being one of the leaders and the only Issuer dedicated to S&L products within Europe, BOOST has worked hard to educate the market and has recently introduced the Boost Advisor Tool Kit, which includes theBoost Advisor Tutorial and Test, S&L Advisor Simulator and a number of educational fact sheets.

    Hector McNeil, Co-CEO, commented: "Boost is continuing to lead the development of the European S&L market. The addition of the unique FTSE 250 ETPs and providing the most comprehensive platform of FTSE 100 S&L ETPs will add significant value to the UK investor community. This is especially the case when we see other European issuers consolidating their offerings, We are also continuing to build up our educational offering on boostetp.com where we have added significant ETF and ETP tools and educational aid; most notably the 'Adviser/Investor Tool Kit'."

    These new products will be continue to be supported by BOOST's designated market maker, KCG, formally known as GETCO. Aidan Hsu, ETF Trader at KCG added, "KCG is delighted to build on our partnerships with BOOST and the LSE to provide liquidity to these new and exciting products on this leading global venue. As the current market makers for all the existing Boost ETPs and the market maker on the LSE, KCG will also facilitate OTC trades for counterparties and clients. We look forward to expanding our role as we combine our advanced technology with exceptional client service to offer unparalleled efficiency, liquidity and connectivity across multiple asset classes globally."

    Sudir Raju, Managing Director, ETP Relationships, at FTSE, said "The FTSE Short and Leveraged indices are ideal for use in ETPs due to their highly transparent, rules based methodologies. We are delighted to be extending our relationship with Boost through the use of further FTSE indices in their new ETPs."

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Boost ETP is an independent ETP issuer.This article was written by Hector McNeil, Co-CEO. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.This communication has been provided by Boost ETP LLP which is an appointed representative of Mirabella Financial Services LLP which is authorised and regulated by the Financial Conduct Authority.

    Aug 06 11:10 AM | Link | 1 Comment
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