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BOOST launches Europe’s first 3x Short Fixed Income ETP on the London Stock Exchange

Wednesday 06th August '14

  • Europe’s first 3x Short Fixed Income ETP listed on LSE
  • UK’s first ever Gilts 10Y 3x short ETPs
  • Demand for short exposure to Fixed Income expected to increase dramatically as rates rise 
  • A staggering 98% of Global AUM for short and leverage Fixed Income ETPs is in short ETPs 
  • Global demand for S&L products continues to grow, with $60bn in AUM (June 2014)1 

London, 06 August 2014: BOOST ETP, A WisdomTree Company and Europe’s award winning, specialist Short and Leverage (S&L) Exchange Traded Product (ETP) provider, is proud to announce that it has listed Europe’s first ever 3x short fixed income ETP on the London Stock Exchange (LSE). 

BOOST’s 3x short fixed income ETP listed on the LSE is: 

Product Name

Boost Gilts 10Y 3x Short Daily ETP 3GIS

The new ETP will track an index which gives exposure to the returns from holding UK 10 year Gilts. Economic activity is picking up in the UK where a rebounding economy is increasingly led by a broad based recovery in domestic demand that, similar to the US, is feeding through into relatively strong employment gains. Coupled with a more hawkish sounding BoE, the risk of UK interest rates increasing sooner rather than later is growing.1

A strong bearish conviction in UK debt is evident in the disproportionate allocation into short positions, which represent 97% of AUM in S&L debt ETPs.1

The new fixed income ETP is designed to return minus 3x the daily movement of the relevant benchmark index. For example, if the BNP Paribas Long Gilt Future Index falls by 1% on a day, then "3GIS" will rise by 3% on that day (less fees and adjustments). Conversely, if the BNP Paribas Long Gilt Future Index rises by 1% on a day, then "3GIS" will fall by 3% on that day.
The ETPs trade and settle the same as equities and the advantages of 3x short ETPs include: 

  • trebling daily returns of an investment (less fees and adjustments)
  • achieving the same exposure as a delta 1 position with 1/3rd of the capital employed
  • hedging existing positions in one simple trade
  • using in a long or short strategy to take advantage of any rises or falls in the market
  • using in a pairs trade to take advantage of undervalued assets
  • getting short the market/asset class quickly, efficiently and cheaply
  • enhancing a balanced portfolio by investing a small percentage tactically when short-term opportunities arise. 

BOOST’s S&L ETP platform now covers the world’s major asset classes, which include equities, fixed income and commodities.

This brings BOOST ETP’s product range to a total of 76 listings on the London Stock Exchange, Borsa Italiana and Xetra.

Hector McNeil, Co-CEO of BOOST ETP, A WisdomTree Company, commented:

"We believe that 3x short Fixed Income ETPs are exciting additions to the UK ETP market and introduce investment products which investors currently demand, but have not been available until now. Given the persistence of low interest rates which cannot fall much further and which the market expects to increase in the near term, BOOST's 3x short ETPs should now give investors a valuable range of new tools which could enhance their investment returns or hedge against rising rates."

The addition of sovereign fixed income 3x short ETPs further enhances BOOST’s extensive multi asset ETP platform. Investors have had strong appetite for BOOST’s equity and commodity offerings and have been requesting fixed income products. BOOST are thought leaders in the short and leverage space, we will continue to innovate and add to our line up in response to investor needs."

Viktor Nossek, Head of Research at BOOST ETP, A WisdomTree Company, commented:

Growing bearishness of S&L investors on fixed income securities was evident in the $1.1 billion in outflows from long positions, globally. Following these large redemptions, 92% of S&L fixed income ETPs’ AUM is now held in short positions, suggesting S&L investors remain overwhelmingly bearishly positioned.”