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PRESS ROOM

Europe’s first Japanese equity Short & Leverage ETPs - TOPIX

Tuesday 16th July '13

  • Boost licences TOPIX index as demand for ETPs tracking Japanese equities increases
  • 1x short and 2x leverage TOPIX ETPs now available on the LSE
  • Japanese equity ETP experience inflows of $12bn in 2013

BOOST ETP, the award winning and independent exchange traded product (ETP) provider, has listed Europe’s first Japanese equity ETPs on the London Stock Exchange, Boost TOPIX 1x Short Daily ETP (1JAS) and Boost TOPIX 2x Leverage Daily ETP (2JAL).  

Following years of stagnation, momentum in Japanese equities has been building, with the TOPIX index rising 64% (from 1 November 2012 to 11 July 2013), beating major DM and EM equity benchmarks. The TOPIX outperformed the FTSE 100 by 24%, the S&P 500 by 14%, the DJ Euro STOXX 50 by 23% and the MSCI Emerging Markets Index by 37% (in USD, over the same period). YTD US$12bn has flowed into Japanese equity ETFs / ETPs, which represents a 22% increase.[1]

Unlike previous monetary stimulus efforts, the BoJ has never been so explicit in communicating its commitment to get rid of deflation.  After announcing the doubling of its inflation target earlier this year, the BoJ reckons that the 2% inflation rate will be attained through the doubling of monetary base to JPY 270tn, of JGBs (Japanese government bonds) holdings to JPY 190tn, and by more than doubling the average maturity of bond holdings from less than 3 years to about 7 years.[2]

 

The new ETPs provide Short and Leverage (“S&L”) exposures to daily changes in the TOPIX TR index.  For example, if the TOPIX rises by 1% on a particular day, then Boost TOPIX 2x Leverage Daily ETP (2JAL) will rise by 2% and Boost TOPIX 1x Short Daily ETP (1JAS) will fall by 1%. However, if TOPIX falls by 1%, then 2JAL will fall by 2% and 1JAS will rise by 1%.  

Boost’s new TOPIX S&L ETPs are:   

Product Name  LSE Code  Leverage Factor 
Boost TOPIX 1x Short Daily ETP   1JAS -1x Boost TOPIX 2x Leverage Daily ETP 2JAL 2x

 

This new launch is BOOST’s third release of new ETPs in the last week which has included five new FTSE ETPs, two of which were world firsts - Boost FTSE 250 1x Short Daily ETP (1MCS) and Boost FTSE 250 2x Leverage Daily ETP (2MCL). Boost’s platform now includes 44 listings on the LSE consisting of 25 ETCs and 19 equity ETPs. 

Being Europe’s only issuer dedicated to S&L products, BOOST is working hard to educate investors about the benefits, risks and uses of S&L products.  As a result, Boost recently introduced the Boost Advisor Tool Kit, which includes the Boost Advisor Tutorial and TestS&L returns simulator and a number of educational fact sheets all of which are available on Boost’s website. 

Hector McNeil, Co-CEO, commented: 

“Japan is one of the World’s most important economies and investors have taken a huge interest in the actions being taken by the Japanese government to try and kick start their economy. Global inflows into Japanese equity ETFs have been enormous in 2013 and European investors have asked Boost to offer these Japanese equity ETPs. “The Boost TOPIX 1x Short Daily ETP (1JAS) and Boost TOPIX 2x Leverage Daily ETP (2JAL) are a first for Europe and should add significant value to investors who want to invest in Japan and hedge existing positions.  Boost has recently added significantly to its equity and commodity offerings and we will continue on focusing on providing value to our clients by continuing to innovate.”

 

1 Sources within this paragraph are Bloomberg & Reuters 
2 Sources within this paragraph are Bloomberg & Reuters