Boost launches Volatility and Emerging Markets ETPs on Borsa Italiana
Thursday 17th March '16
Boost further strengthens its market leading position in short & leveraged ETPs in the Italian market with new equity and volatility offerings
Boost’s new volatility ETPs provide exposure to the S&P 500 VIX futures, which represent the world’s leading volatility indicator
Boost’s new Emerging Markets ETPs provide exposure to MSCI Emerging Markets Index futures
Milan, 17 March 2016: WisdomTree Europe, an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor is proud to announce that it has listed three new ETPs on Borsa Italiana.
|Boost S&P 500 VIX Short-Term Futures 2.25 x Leverage Daily ETP||IE00BYTYHQ58||VIXL|
|Boost Emerging Markets 3x Leverage Daily ETP||IE00BYTYHN28||3EML|
|Boost Emerging Markets 3x Short Daily ETP||IE00BYTYHM11||3EMS|
The new ETPs come on the back of increasing demand for Boost’s Short & Leveraged ETPs. As of 10 March 2016, ETPs issued by Boost reached almost $500 million in AUM and these new ETPs add more breadth and depth to Boost ETP’s already comprehensive product list. At the beginning of March 2016 , Boost ETPs had some 55% market share with respect to all ETC contracts traded on the Borsa Italiana. Boost has the most actively traded product and four products in the top ten most actively traded products on the Borsa Italiana’s ETFPlus segment .
Boost is listing the first product offering leveraged exposure to the benchmark VIX volatility index in Italy. The Index measures the return from a daily rolling long position in the first and second month VIX futures contract. The S&P 500 VIX Short-Term Futures Index ER is considered a useful tool for hedging against potential large and sudden drops in the US equity market and, historically, has had a negative correlation to the S&P 500. The Boost S&P 500 VIX Short-Term Futures 2.25x Leverage Daily ETP provides 2.25 times the daily performance of the Index, adjusted to reflect fees and costs inherent to maintaining and rolling a leveraged position in the futures, plus interest revenue earned on the collateralised amount.
The Boost Emerging Markets ETPs provide 3x long and 3x short exposure to the Emerging Equities Rolling Futures Index, which tracks Front Quarter and Second Quarter MSCI Emerging Markets Index futures. The MSCI Emerging Markets Index futures provide exposure to the MSCI Emerging Markets Index, a free float-adjusted market capitalisation index designed to measure the equity market performance of the following 23 emerging markets countries: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Russia, Qatar, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. With 835 constituents, this index covers approximately 85% of the free float-adjusted market capitalisation in each country covered.
The Boost Emerging Markets 3x Leverage Daily ETP and the Boost Emerging Markets 3x Short Daily ETP provide three (3) times long and (3) times short (respectively) the daily performance of the Index, in both cases adjusted to reflect fees and costs inherent to maintaining and rolling a leveraged position in the futures, plus interest revenue earned on the collateralised amount.
Boost’s S&L ETP platform now covers the world’s major asset classes, which include equities, volatility, fixed income, currencies, and commodities. This brings BOOST ETP’s product range to a total of 128 listings on Borsa Italiana, the London Stock Exchange, and Germany’s Xetra.
Viktor Nossek, Director of Research at WisdomTree Europe, commented:
“This years’ volatility underpinned by China’s slowdown and slumping commodities has soured sentiment in risk assets, forcing global growth expectations down and creating opportunities to position bearishly in equities. US equity markets’ relative high exposure to tech stocks suffering from recent disappointing financial results and downgraded growth expectations has added to the rise volatility in the US equity markets. With a leveraged S&P 500 VIX futures ETP, investors can short term efficiently position around rising risks in equity markets by using less capital to obtain the same (unlevered) exposure or amplify their exposure with the same capital.
The geared long and short ETPs tracking Emerging Markets are a way to position tactically around the uncertainty in the region, as 2016 begins with a stark divergence in the outlook on growth within the region: Russia and Brazil are in recession, China’s politically orchestrated rebalancing is enforcing an economic slowdown, even while India still sustains a boom. However, much of these expectations remain driven by volatile commodity prices, and the recent rebound of crude oil is giving EM commodity exporter stocks another boost. Until the dust settles and the economic picture for the region stabilises, investors may look for short-term opportunities to trade in and out, or hedge their EM exposure which, using leverage, requires less capital to achieve. These new products provide investors with a new set of momentum and hedging opportunities within the Boost S&L ETP range”.
Nik Bienkowski, Co-CEO of WisdomTree Europe commented:
“Boost, as an issuer, is delighted to be at the forefront of meeting demand from clients to extend our already market leading range of ETPs in the Italian market. These new products provide additional diversification opportunities and solutions to allow our clients to manage their portfolio exposures. These exciting new listings help build out our coverage across all the key asset classes including a unique exposure to equity volatility.”
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 $45.5 billion (as of 10 March 2016). For more information, please visit .
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 assets
- 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
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.