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BOOST 3x ETPs experience record trading volumes in first week of trading in Italy

Thursday 14th November '13

  • BOOST listed Italy’s first 3x Short and Leverage equity and commodity ETPs
  • World first for 3x FTSE MIB Short (3ITS) and Leveraged (3ITL) ETPs on ETFplus market
  • BOOST ETP trading volumes of EUR 2.9m on Borsa Italiana were a record for Boost ETPs in only their first week of trading
  • BOOST grabbed approximately 3% market share last week
  • Short and Leverage ETFs and ETCs were the most traded ETFs and ETCs on Borsa last week , with FTSE MIB and Natural Gas being the most popular
BOOST ETP, the award winning and independent Exchange-Traded Product (ETP) has listed eight new 3x Short and 3x Leveraged ETPs on the Borsa Italiana for the first time. The two ETPs tracking the FTSE MIB (Boost 3x FTSE MIB Leverage Daily ETP “3ITL” and Boost 3x FTSE MIB Short Daily ETP “3ITS”) are a world first for 3x leverage ETPs to track the FTSE MIB.

BOOST ETP’s list of S&L ETPs available on Borsa Italiana are: 

Product Name

ISIN Ticker
Boost FTSE MIB 3x Short Daily ETP IE00B873CW36 3ITS
Boost FTSE MIB 3x Leverage Daily ETP
IE00B8NB3063 3ITL
Boost ShortDAX 3x Daily ETP IE00B8GKPP93
Boost LevDAX 3x Daily ETP
Boost EURO STOXX 50 3x Short Daily ETP
Boost EURO STOXX 50 3x Leverage Daily ETP
Boost Natural Gas 3x Short Daily ETP
Boost Natural Gas 3x Leverage Daily ETP

Boost listed the above ETPs on the Borsa Italiana ETP Plus ETC/ETN platform on the 29th October 2013. Last week, Boost ETPs traded EUR 2.9m. This represented approximately 3% market share last week which included a record trading day for a Boost ETP launch.

Demand for transparent, liquid and robust S&L ETPs has increased over the past few years with global S&L ETP assets rising to around $52bn [ Boost ETP Short & Leveraged Global ETP Report, 31 October 2013], as many financial markets have trended sideways, resulting in volatile but poor long term returns. Investors have increasingly needed to focus on tactical and hedging opportunities to ensure they preserve and grow their capital. 

S&L ETFs and ETPs are extremely popular with Italian investors. Last week the most popular equity ETF traded on Borsa Italiana was a Leverage ETFs. The 2x Short FTSE MIB ETF and the 2x Leverage FTSE MIB ETF traded a total of 23% of total ETF turnover last week.

Five of the top seven most popular ETPs traded on Borsa Italiana last week were also Short and Leverage ETPs; these five ETPs made up 40% of trading volumes. The most popular ETP on Borsa Italiana last week was the 2x Leverage Natural Gas ETC.

BOOST is the first ETP/ETC issuer of 3x Short and 3x Leveraged commodity and equity ETPs on the Borsa Italiana ETFplus market. The eight ETPs are designed to return 3x the daily movement, long or short, of the relevant benchmark index. For example, if the FTSE MIB rises by 1% on a particular day, then "3ITL" will rise by 3% and "3ITS" will fall by 3%. However, if the FTSE MIB falls by 1% then "3ITL" will fall by 3% and "3ITS" will rise by 3% (less fees and adjustments).

The listing of the eight new 3x leveraged and 3x short ETPs follows BOOST listing 44 ETPs on the London Stock Exchange in December 2012 and throughout 2013. Throughout 2013 BOOST has worked hard to develop its educational materials to help investors better understand short and leveraged ETPs/ETF structure, benefits and risks. Educational tools include the ‘Adviser/Investor Tool Kit’ which includes a Tutorial and Test, a Returns Simulator, various fact sheets and FAQs. BOOST also provides regular conference calls and face to face educational opportunities for investors. These tools and events will also be offered to Italian investors.

Co-CEO, Hector McNeil commented: 

“The Italian investor appetite for well-constructed and highly liquid investment products is very high. Boost has seen significant activity already in its flagship Italian ETPs including the Boost FTSE MIB 3x Leverage Daily ETP (3ITL) and Boost FTSE MIB 3x Short Daily ETP (3ITS). We also saw significant interest in Boost Natural Gas 3x Leverage Daily ETP (3NGL) and Boost Natural Gas 3x Short Daily ETP (3NGS). To gain nearly 3% market share for the Borsa Italiana ETP Plus ETC/ETN segment after less than 4 days of trading is spectacular. We will be very excited to see what the results for November will be.

Boost will be looking to continue to expand and develop its Italian business and we will be focusing on adding value to investor investment processes. This will involve informative educational events, webinars and website content as well as new and exciting product launches. “

BOOST specialises in providing sophisticated investors with short and leveraged ETPs which give investors instant exposure to highly liquid underlying markets in one single trade. Investors can now get exposure to leveraged returns without having to borrow the additional funds to gain the additional long exposure, or the need to borrow the underlying shares and then sell those shares in order to short the market. BOOST will be providing significant educational support to the investment community with the aim of ensuring investors can maximise their usage of the products.

The new ETPs will help expand the investment horizons of investors and will allow them to execute a wide variety of strategies which will include:

  • leverage the daily returns of an investment for the same capital as a non-leveraged trade
  • hedge existing positions in one simple trade
  • use a long or short strategy to take advantage of any short term rises or falls in the market, especially in a sideways trending market
  • use in pairs to trade and take advantage of undervalued assets
  • get short the market efficiently and cheaply without having to arrange and finance complex stock borrowing positions
Similar to Exchange Traded Funds (ETFs), BOOST ETPs are liquid, accessible and simple. BOOST ETPs can be created and redeemed on a continuous basis by market makers, matching the tremendous liquidity of the underlying markets tracked, and can be traded by investors on a regulated Exchange in the same way as any equity. BOOST ETPs will provide accurate and transparent leveraged and short exposure to recognised benchmarks in a single trade. In addition, BOOST leveraged and short ETPs require no borrowing of stock or funds to gain the relevant exposure. BOOST ETPs are simply priced off transparent indices published by world class index providers.

BOOST ETPs will be backed by a robust risk management system where (i) depending on the credit rating of BOOST's counterparties, the mix of sovereign bonds held in the posted collateral will slowly increase, and (ii) no cash or collateral will be delivered by BOOST to a counterparty unless BOOST has received payment first.