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PRESS ROOM

Boost launches Italy’s first 5x short Fixed Income ETPs on Borsa Italiana

Wednesday 15th July '15

In addition to this, Boost launches Italy’s first 4x short and 4x leverage FX ETPs

London, 15 July 2015: WisdomTree Europe, an exchange traded fund (“ETF”) and exchange traded product (“ETP”) sponsor is proud to announce that it has listed Italy’s first ever range of 5x short fixed income ETPs, as well as Italy’s first ever 4x short & 4x leverage (S&L) FX ETPs on Borsa Italiana.  

The new ETPs come on the back of increasing demand for S&L ETPs.  At the end of June, ETPs issued by Boost reached $383 million in AUM, with new record monthly turnover of $1.2 billion in June.  The Boost US Treasuries 10Y 3x Short DailyETP (3TYS), is currently Boost’s largest short ETP with $25m in AUM as at 13 July 2015, with 99% of Boost’s investors being short and 1% long.  The launch of 4x FX ETPs comes on the back of strong trading volumes of S&L FX ETPs on Borsa Italiana where EUR-USD ETPs have consistently ranked in the top 10 trading ETPs every month the year to date. Boost’s FX investors are currently 83% long USD and 17% short USD versus euro.

The new fixed income ETPs will track indices giving exposure to the returns from holding 10Y US Treasury futures, 10Y BTP (Italian Government) futures and 10Y Bund (German Government) futures. There is US$6.1 billion[1] of S&L debt ETPs tracking US Treasuries globally, with 97% of this currently short.  German and Italian government debt are the most popular S&L European debt ETPs, with US$1.4 billion and US$308 million in AUM as at 30 June 2015, respectively.  

The 5x short fixed income ETPs are designed to return 5x the daily movement of the relevant benchmark index. For example, if the BNP Paribas Long Term BTP Future Index falls by 1% on a day, then "5BTS" will rise by 5% on that day (less fees and adjustments). Conversely, if the BNP Paribas Long Term BTP Future Index rises by 1% on a day, then "5BTS" will fall by 5% on that day.  

The Long USD Short EUR and Short USD Long EUR ETPs with 4x leverage factors complement Boost’s existing 5x EUR/USD ETPs, giving investors more choice to position bullishly or bearishly on the U.S. dollar relative to the euro.

BOOST’s S&L ETP platform now covers the world’s major asset classes, which include equities, fixed income, currencies, and commodities.  This brings BOOST ETP’s product range to a total of 95 listings on Borsa Italiana, the London Stock Exchange, and Germany’s Xetra. [1] Source: Bloomberg and Boost ETP, A WisdomTree Company  Short & Leveraged ETFs/ETPs Global Flows Report, 30 November 2014.

Nik Bienkowski, Co-CEO of WisdomTree Europe commented:

"We believe that 5x short Fixed Income ETPs are very useful additions to Italy’s ETP market and complete the existing Boost range of 3x short Fixed Income ETPs launched back in August 2014. The Boost US Treasuries 10Y 3x Short Daily ETP (3TYS) is currently Boost’s largest short ETP with $25m in AUM as at 13 July 2015, with 99% of Boost’s investors being short and 1% long. Relative to unleveraged exposures, investors using 5x short ETPs can commit less capital to obtain the same exposure to the underlying or commit the same capital and amplify the exposure. Boost now offers S&L ETPs covering equities, fixed income, FX and commodities.  In the 12 month period from June.”

 

Viktor Nossek, Director of Research at WisdomTree Europe, commented: “The decision by the ECB to implement its large-scale asset purchase program (a.k.a. QE) this year has helped to artificially suppress long-dated bond yields. This coming at a time just when uncertainty underpinned by rising deflation risks in the Eurozone threatened to undermine the stability of indebted economies. Now, with better inflation data coming through in Italy and core Eurozone but Greece causing renewed default fears of indebted members, Eurozone’s bond markets have recently succumbed to volatility, putting even German Bunds, considered the safest of safe havens under pressure. This has sparked a reversal in the trend of falling bond yields, and opening up opportunities for investors to opportunistically position bearishly on Italian BTPs and German Bunds.”

-END-

 

About WisdomTree Europe Ltd. WisdomTree Investments, Inc., through its subsidiaries in the U.S. and Europe, including WisdomTree Europe Ltd. based in London, is an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager.  WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies.  Through WisdomTree Europe Ltd, it sponsors WisdomTree UCITS ETFs and BOOST short and leverage ETPs.  WisdomTree currently has approximately $62.5 billion in assets under management globally (as of 13 July).  For more information, please visit www.wisdomtree.com.

WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.  

BOOST ETPs help expand the investment horizons of investors and allow them to execute a wide variety of strategies which 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
  •  Pair  trading to take advantage of undervalued asset
  •  Shorting 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 and can be traded by investors on a regulated exchange in the same way as any equity. BOOST ETPs 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 are backed by robust risk management where (i) depending on the credit rating of BOOST’s counterparties, the mix of sovereign bonds held in the posted collateral will increase, and (ii) no cash or collateral will be delivered by BOOST to a counterparty unless BOOST has received payment first.

BOOST ETP's key features include:

  • Independence - BOOST is independent from any investment bank, swap provider, market maker, trustee or custodian
  • Best of breed – BOOST’s founders have over 25 years of experience in the ETP market.  With this experience, plus the wealth of experience provided by BOOST’s world class service providers, investors are able to enjoy efficient products with liquidity, strong counterparty risk management and relatively low costs ·         
  • Transparency – BOOST discloses all fees, collateral holdings and details on its website each day ·        
  • Innovative and nimble - BOOST aims to be a leader in innovation, as evidenced by the ETPs issued, and the product development and market research behind the products  
  • Focused and specialised - BOOST's strategy differs from the existing ETP issuers by not focusing on being everything to everyone ·         
  • Educational - BOOST focuses on providing all the educational and thought leadership tools needed by investors

www.boostetp.com

Disclaimer

This communication has been provided by WisdomTree Europe Ltd which is an appointed representative of Mirabella Financial Services LLP which is authorised and regulated by the Financial Conduct Authority.   The products discussed in this document are issued by BOOST Issuer PLC (the “Issuer”) under a Prospectus approved by the Central Bank of Ireland as having been drawn up in accordance with the Directive 2003/71/EC. The Prospectus has been passported from Ireland into the United Kingdom and is available on the websites of the Central Bank of Ireland and the Issuer. Please read the Prospectus before you invest in any Exchange Traded Products (“ETPs”). Neither the Issuer nor BOOST ETP LLP is acting for you in any way in relation to the investment to which this communication relates, or providing investment advice to you. The information is not an offer to buy or sell or solicitation of an offer to buy or sell any security or investment. You are advised to seek your own independent legal, investment and tax or other advice as you see fit. The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. An investment in ETPs is dependent on the performance of the underlying index, less costs, but it is not expected to match that performance precisely. ETPs involve numerous risks including among others, general market risks relating to the relevant underlying index, credit risks on the provider of index swaps utilised in the ETP, exchange rate risks, interest rate risks, inflationary risks, liquidity risks and legal and regulatory risks. ETPs offering daily leveraged or daily short exposures (“Leveraged ETPs”) are products which feature specific risks that prospective investors should understand before investing in them. Higher volatility of the underlying indices and holding periods longer than a day may have an adverse impact on the performance of Leveraged ETPs.  As such, Leveraged ETPs are intended for financially sophisticated investors who wish to take a short term view on the underlying indices. As a consequence, BOOST ETP LLP is not promoting or marketing BOOST ETPs to Retail Clients. Investors should refer to the section entitled "Risk Factors" and “Economic Overview of the ETP Securities” in the Prospectus for further details of these and other risks associated with an investment in Leveraged ETPs and consult their financial advisors as needed.  This marketing information is intended for professional clients & sophisticated investors (as defined in the glossary of the FCA Handbook) only. This marketing information is derived from information generally available to the public from sources believed to be reliable although BOOST ETP LLP does not warrant the accuracy or completeness of such information. All registered trademarks referred to herein have been licensed for use. None of the products discussed above are sponsored, endorsed, sold or promoted by any registered trademark owner and such owners make no representation or warranty regarding the advisability on dealing in any of the ETPs.