WisdomTree Issues 7 New Boost Exchange Traded Commodities on Borsa Italiana
Thursday 09th April '15
- Boost, A WisdomTree Company, lists 7 new ETCs on the Borsa Italiana tracking the most popular commodities of oil, gold and natural gas
- With commodity prices having trended down in recent times, including Brent oil having fallen by around 60% from mid-June 2014 to mid-January 2015, Boost is launching its first unleveraged ETCs
- With record demand for Boost WTI Oil 3x Leverage Daily ETP (IE00B7ZQC614 – “3OIL”), Boost is expanding its product range for oil investors with the launch of 1x short, 2x short and 2x leveraged ETCs, in addition to two unleveraged oil ETCs
- Boost offers the most liquid oil, natural gas and gold short & leveraged ETC platform in Europe, as the Boost platform’s monthly notional turnover exceeded $2.2bn and total AUM rose above $300m for the first time
- With the new unleveraged ETCs, Boost hopes to attract new investors as well provide existing investors’ cost-effective ETCs for longer term investments
Milan, 09 April 2015: WisdomTree Europe, an exchange traded fund (“ETF”) and exchange traded product (“ETP”) sponsor, and specialist in short & leverage (“S&L”) ETPs through the Boost ETP product range, is proud to announce the launch of the following Exchange Traded Commodities (“ETCs”) on Borsa Italiana:
Hector McNeil, Co-CEO of WisdomTree Europe, had this to say about the launch:
“The introduction of 7 new ETCs reinforces Boost’s commitment to the Italian market. The record $224m of AUM held in Italy and $650m in volumes in March is clear evidence of investors’ appetite for Boost’s unique product offering. The provision of 5 new oil ETCs including leverage factors of 2x leverage and -1x short and unleveraged ETCs tracking Brent oil and WTI oil means that Boost now offers one of the most comprehensive oil ETC platforms in Europe.
The new unleveraged Oil, Gold and Natural Gas ETCs are Boost’s first unleveraged ETCs. With the new unleveraged ETCs, Boost hopes to attract new investors as well as cater to existing investors with cost-effective ETCs for longer term investments.”
Viktor Nossek, Director of Research for WisdomTree Europe, had this to comment:
“The path of US natural gas and crude oil prices ahead is likely to be volatile in the short term, as investors assess the historically low energy prices against an uncertain global macro backdrop. In the longer term, given the discounted prices of crude oil and natural gas, commodities may regain strength as the uncertainty in the Middle East ebbs, emerging markets deleverage, and early signs of Europe recovering translate into a more upbeat sentiment on energy commodities. Boost’s unleveraged ETCs offer investors the chance to take a long term view.”
The launch comes on the back of increasing AUM and volumes for Boost. Boost’s platform hit a new record with trading volumes of $754m in March, adding up to a notional trading volume exceeding $2.2bn. Boost’s notional trading volumes for S&L ETCs exceeded those of every other issuer in gold (by 16%), in oil (by 35%) and in natural gas (by 140%). Boost also reached a record $324m of AUM in March . Trading volumes in Boost’s platform have been on a clear growth trend with monthly turnover more than tripling over the past 6 months. Boost has also experienced marked growth in Italy – AUM for Boost ETPs held in Italy exceeded €200m for the first time while monthly turnovers reached an all-time high of $650m.
Now, for the first time, Boost is launching unleveraged ETCs tracking the most popular commodities. There are $2bn invested in unleveraged oil ETCs in Europe and $23bn in unleveraged gold ETCs and ETFs . With gold prices having fallen from nearly $1,900/oz in May 2011 to $1,200/oz today , and with Brent oil having fallen from $115/bl in June 2014 to $58/bl today , commodities are slowly returning to investors’ radar screens. While Short and Leveraged ETCs are used by investors for short term strategies, unleveraged ETCs may be considered for short term as well as longer term strategies. With commodity prices off their highs as well as the potential diversification properties of commodities in a portfolio, unleveraged ETCs are a useful addition to Boost’s ETC platform.
Boost’s ETCs track NASDAQ commodity indices which reflect an investment in front-month contracts which are generally the most liquid futures contracts for any commodity. Boost is listing two oil ETCs tracking WTI oil and Brent oil, which provide access to the world’s two most traded oil benchmarks being West Texas Intermediate and Brent Crude. By offering investors both oil benchmarks, Boost investors can allocate strategically as well as tactically to oil depending on specific factors affecting the relevant benchmark.
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 Boost platform. Boost now offers 57 ETPs & ETCs across four exchanges, covering the world’s major benchmarks in equities, commodities, fixed income and currencies.
3Source: Borsa Italiana
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 $58.4 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 investors benefit from efficient products with liquidity, strong counterparty risk management and relatively low costs as well as the wealth of experience provided by Boost’s management and world class service providers
- 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
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