Boost US Large Cap ETPs to Track S&P 500 Index
Thursday 23rd July '15
- Boost, Europe’s specialist Short and Leverage (S&L) Exchange Traded Products provider, is changing the underlying index of its ETPs giving exposure to US large cap equities, from the Russell 1000 index to the S&P 500®
- Boost ETPs tracking US equity indices now total $56m in notional assets, up 28% in July
- Trading volumes of Boost’s ETPs reached a new high last month, with total notional trading volume exceeding $3bn
- Boost offers 67 ETPs which track the main benchmarks in equities, fixed income, currencies, and commodities, including a range of non-leveraged Exchange Traded Commodities
The changes are summarised as follows:
The change comes as both trading volumes and AUM of Boost ETPs reached new highs, as investors increased their use of Boost’s ETPs to implement bullish or bearish views in volatile markets. Turnover in Boost ETPs, which are listed on the London Stock Exchange, Borsa Italiana and Germany’s XETRA platform, have been growing at an average rate of over 40% per month for the past two years, to approximately $1.1bn in June, or $3.3bn in notional terms. Assets in Boost’s 3x Short and 3x Leveraged US Large Cap ETPs have more than doubled in the past month, as investors express bearishness on US large cap equities with 74% of the AUM being 3x short, and 26% being 3x long.
WisdomTree Europe Co-CEO, Nik Bienkowski, commented:
“We are pleased to be working with a leading index provider such as S&P Dow Jones Indices, and to bring one of the world’s most recognisable US equity indices on to our platform. Demand for S&L ETPs has been increasing month on month, with demand for 3x short US equities increasing by 100% this month, along with record demand for 3x leverage oil. Due to this increased demand and switch to the S&P 500 index, investors in Boost’s US equity ETPs should benefit from tighter spreads and improved liquidity throughout the European trading day.”
S&P Dow Jones Indices North American Equities, Vice President, Phil Murphy commented:
“We are pleased to further our relationship with WisdomTree Investments through the licensing of our iconic S&P 500 stock market index. S&P Dow Jones Indices already has a strong relationship with WisdomTree in the U.S., and this agreement via its subsidiary, WisdomTree Europe, further strengthens the association.”
Boost’s growth has been driven by product innovation and a focus on proactively educating investors about the benefits and risks of using S&L ETPs. The many different investment strategies that investors can employ also add to the usefulness of the products. Boost offers ETPs covering all the major indices across equities, commodities, fixed income and currencies.
 Source: Bloomberg, Boost as of July 15th
 Source: Boost, as of July 15th
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 $64 billion (as of 15 July 2015) in assets under management globally. 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 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.S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”), a part of McGraw Hill Financial. Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks have been licensed to S&P Dow Jones Indices LLC (“S&P DJI”). It is not possible to invest directly in an index. S&P D JI does not make investment recommendations, and S&P DJI, Dow Jones, S&P and their respective affiliates do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. S&P DJI receives compensation in connection with licensing its indices to third parties.