BOOST ETP ISSUES ITALY’S FIRST 3X SHORT AND 3X LEVERAGE EXCHANGE TRADED PRODUCTS ON BORSA ITALIANA
Thursday 31st October '13
- BOOST to list its first 8 ETPs/ETCs on Borsa Italiana
- First ever 3x Short and 3x Leverage Exchange Traded Products on Borsa Italiana
- World first for 3x FTSE MIB Short and Leveraged ETPs on ETFplus market
- Italy’s first 3x Short and 3x Leveraged ETPs tracking DAX, Eurostoxx and Natural Gas
- Short and Leverage ETFs and ETCs are the most traded ETFs and ETCs on Borsa in September , with FTSE MIB
BOOST ETP, the award winning and independent Exchange-Traded Product (ETP) provider announced today that it is listing eight 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 UK platform, listed on the London Stock Exchange, totals 44 short and leverage ETPs tracking the world’s most liquid equity and commodity indices. BOOST ETPs have listed eight ETPs on Borsa Italiana, bringing the total listings to 52.
BOOST ETP’s list of S&L ETPs to be made available on Borsa Italiana are:
|Boost FTSE MIB 3x Short Daily ETP||IE00B873CW36||3ITS|
|Boost FTSE MIB 3x Leverage Daily ETP
|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
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 August 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 with products already available with leverage factors of -1x, -2x and +2x. With the launch of BOOST ETP’s products, Italian investors now have local access to 3x short and 3x leverage ETPs for the first time.
The two most popular equity ETFs traded on Borsa Italiana in September 2013 were Short and Leverage ETFs. In August the 2x Short FTSE MIB ETF traded a total of EUR 568m, equal to 11.9% of total ETF turnover. The 2x Leverage FTSE MIB ETF traded a total of EUR 460m, equal to 9.6% of total ETF turnover.
The two most popular commodity ETCs traded on Borsa Italiana in August were also Short and Leverage ETCs. In August, the 2x Leverage Natural Gas ETC traded a total of EUR 47.8m, equal to 12.62% of total ETC turnover. The 1x Short Natural Gas ETC accounted for EUR 31.2m equal to 8.23% of total ETC turnover.
BOOST is the first ETP/ETC issuer of 3x Short and 3x Leveraged 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 Nik Bienkowski commented:
“Italian investors are very familiar with ETFs that track short and leverage daily returns. The 2x Leverage and 2x Short FTSE MIB ETFs and the 2x leverage and 1x Short Natural Gas ETCs were the most traded ETFs and ETCs on Borsa Italiana in September and August. BOOST believes that 3x ETPs are the natural progression in the evolution of the Italian ETP market.
BOOST is very proud to be listing Italy’s first 3x Short and 3x Leverage ETPs on the Borsa Italiana. Short and Leverage products can be useful tools, allowing investors to hedge portfolios or take short terms views on the world’s major commodity and equity indices. Having already assisted with the launch of short and leverage ETCs in Italy before, BOOST’s founders look forward to continuing their relationship with the Italian market.”
KCG will act as the official market maker for the eight new ETPs to provide the highest retail order execution quality to both institutional and retail investors alike. KCG will act as specialist as per Borsa Italiana Rules to provide competitive pricing throughout the trading day.
Aidan Hsu, Head of European ETFs at KCG, commented:
“KCG is very pleased to continue as Boost ETP’s market marker of choice as it extends its offering into Italy. ETPs, particularly leveraged products, have been popular with investors and traders in this market, seeking transparent and quality investments. We look forward to continuing our collaboration with Boost ETP as we combine our advanced technology with exceptional client service to provide efficient and liquid markets for the Borsa Italiana listed ETPs.”
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.