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PRESS ROOM

‘Short & Leverage ETF/ETP Adviser Tutorial and Test’ launched as part of Boost ETP’s educational goals

Thursday 08th August '13

BOOST ETP, the award winning and independent Exchange Traded Product (ETP) provider, has announced that it has launched the BOOST ‘Short & Leverage ETF/ETP Adviser Tutorial and Test’ to add to its range of educational materials. 

The Adviser Tutorial and Test has been designed to provide a simple and practical approach to understanding how an ETP works for anyone considering an investment in a Short or Leveraged (“S&L”) ETF or ETP. 

This tutorial has been created by BOOST ETP to assist advisers and investors in understanding the benefits and the risks of investing in S&L ETPs. The five sets of multiple choice questions should be completed after the tutorial has been read. The tutorial is ETP provider generic and covers S&L Exchange Traded Funds (ETFs), Exchange Traded Commodities (ETCs) and Exchange Traded Notes (ETNs). Successful completion of the tutorial and questions should ensure a good understanding of S&L ETPs by the test-taker. 

BOOST currently has 44 products listed on the London Stock Exchange. BOOST recently added 16 new S&L ETPs to its platform and, firmly believes in providing investors the educational tools and thought leadership required to understand S&L ETPs. BOOST’s educational tools include the following:- 

• NEW – Short & Leverage ETF/ETP Adviser Tutorial and Test 
• Short & Leveraged ETF/ETP Adviser Tool Kit 
• ETF/ETP Short & Leveraged Returns Simulator 
• Educational Fact Sheets 
• Trading Techniques 

The educational materials are a response to a number of concerns by global regulators regarding the use of leverage by investors who may not fully understand the risks involved. In Europe, ESMA and the EBA are concerned that during the current period of low investment returns, inexperienced investors across the EU are being tempted to invest in complex financial products (such as CFDs and spread bets), which they may not fully understand and which can end up losing them money they cannot afford to lose. BOOST’s focus on education should help ensure that advisers better understand the risks and benefits of S&L ETPs and also clearly show how the products are, in many ways, one of the best products to access leverage. When compared to other leverage products such as structured products, CFDs, spread bets or warrants, S&L ETPs have some distinct advantages such as: 

• An investor cannot lose more than their initial investment 
• S&L ETPs trade and settle on Exchange with a multiple market maker model 
• S&L are fully collateralised and this helps mitigate counterparty risks 

Hector McNeil, Co-CEO of BOOST commented: 
“BOOST has worked hard since its launch to provide world leading educational toolkits to investors to help them better understand S&L ETPs. These include face to face conferences, dial in conference calls and a top class website with an excellent educational section. ‘The Adviser Tool Kit’ has been well received by the UK investor market to date. The latest addition to the tool kit is the ‘S&L ETF/ETP Adviser Tutorial and Test’ which should become a valuable compliance tool for wealth managers and stock brokers who want to ensure their staff and clients understand the S&L product. Given S&L ETPs are in the top 10 most traded ETPs on the LSE (July 2013) there is a clear need for a broader and better understanding of the product by all involved. Concepts such as daily rebalancing and compounding are features of the S&L product and need to be understood. BOOST wants to be the driving force behind this.” 

“Once advisers and investors better understand S&L ETPs, we think the usage and market for them will grow exponentially, perhaps outstripping standard ETFs. We also feel that investors will start to see S&L ETPs as a better and safer way to trade short and leverage compared to CFDs, spread bets, structured products, covered warrants etc.”