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PRESS ROOM

Boost’s short and leveraged ETP platform is the most liquid in Europe for trading oil and natural gas

Tuesday 10th February '15

• Boost proved to be the S&L platform of choice for trading oil and natural gas 

• With the price of oil hitting $44/bl, Boost’s S&L oil ETPs traded nearly $500m in notional volume in January, 20% more than any other issuers’ S&L ETPs
• Boost’s S&L natural gas ETPs had $375m of notional volume, more than twice any other issuer
• Total notional volume across the Boost platform hit a record of $1,547m in January
• The most recent rise in volume coincides with increased concerns about CFD and spread betting firms going bust

London, 10 February 2015: WisdomTree Europe, an exchange traded fund (“ETF”) and exchange traded product (“ETP”) sponsor, and specialist in short and leverage (“S&L”) ETPs through the Boost ETP product range, is proud to announce that its range of S&L oil and natural gas exchange traded contracts (“ETCs”) are now the most liquid in Europe. Boost’s ETCs are listed on the London Stock Exchange, Borsa Italiana and the Germany’s Xetra.
 
Boost’s ETPs hit a new record of $518m in trading volume in January, adding up to a notional volume exceeding $1.5bn. The new record comes against the backdrop of a rise in market volatility and increasing concerns over the robustness of spread betting and CFD firms, a few of which have entered administration or frozen client accounts over the past month.

Trading volumes in Boost’s platform have been on a clear growth trend, more than tripling over the past 6 months. As January closed, Boost reached a record of $201m in AUM1, or $592m in notional terms. This growth suggests that Boost S&L ETPs are not only becoming the product of choice among other ETPs, but also increasingly gaining market share against other product types such as CFDs, spread bets, warrants, certificates and structured products. ETPs lead the way in counterparty risk management offered through their collateral, and draw investor appeal due to their exchange-traded advantages, as well as their simplicity versus other leveraged offerings, since investors cannot lose more than their original investment in an ETP or face their positions being closed automatically due to margin requirements.

 
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 product. Boost now offers ETPs covering all the major indices across equities, commodities, fixed income and currencies, having recently launched 3x short and 3x leveraged fixed income ETPs and also a 5x short and 5x leveraged EUR-USD ETP. Boost ETP’s product range totals 95 listings on London Stock Exchange, Borsa Italiana, and Germany’s Xetra.
 
Nik Bienkowski, Co-CEO of WisdomTree Europe commented:

“The 87% growth in AUM and 266% growth in trading volumes in Boost ETPs over the past 6 months is very impressive. It clearly shows that investors have a strong appetite for robust and transparent short and leveraged investment vehicles. With increased volatility and the recent float of the Swiss Franc versus the Euro, Boost’s collateralised structure continues to shine above other product structures. 

Having launched the platform in December 2012, Boost now boasts the most liquid short and leveraged platform in Europe for trading oil and natural gas. With the recent crash in oil prices from $98/bl to $48/bl over the past 6 months , our clients were at first looking to profit from falling oil prices, however more recently, renewed interest in 3x leveraged oil appears to indicate that investors are becoming less bearish.”

Viktor Nossek, Director of Research at WisdomTree Europe, added:

“The sharp downward trajectory in oil since the summer of last year stood out as the main macro event underpinning commodities. Investors would have benefited from using geared short ETPs tracking oil as a means to efficiently position bearishly around crude oil’s price slump. 

“In December 2014 oil futures fell 20% and in January they fell by another 10%. Over the same period, BOOST WTI Oil 3x Short Daily ETP (3OIS) returned 167% (from 1 Dec 2014 to 30 Jan 2015), demonstrating once again that geared short ETPs are capital efficient investments in downward trending markets. Geared short ETPs can amplify returns of investors desiring opportunistic bearish positioning, as well as enabling them to build hedges to protect long positions over several weeks and even months to ride out the storm."

Boost has worked hard to develop its educational materials to help investors better understand the structure, benefits and risks of short and leverage ETPs/ETFs. Educational tools include the ‘Adviser/Investor Tool Kit’ which includes a tutorial and test, a returns simulator and various fact sheets and FAQs. Boost also provides regular conference calls and face-to-face educational opportunities for investors.


1 - As of 3rd of February, 2015


-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 $45.1 billion 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

 
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 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 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 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.