BOOST Lists Ten 3x Long and 3x Short Commodity ETCs on the LSE
Thursday 20th December '12
- Includes 3x gold and 3x oil ETCs
- Brings BOOST’s total of 20 ETPs providing 3x exposure to equities and commodities
- AUM hits $18m
BOOST ETP (BOOST), the independent Exchange Traded Product (ETP) provider, announces today that it has listed ten new Exchange Traded Commodities (ETCs) on the London Stock Exchange (LSE). This brings BOOST’s product lineup to 20 ETPs, providing 3x leveraged and 3x short exposure to some of the most liquid and widely followed commodity and equity global indices.
BOOST’s ten new commodity ETCs track a range of indices provided by NASDAQ, which are a variety of front month indices from the NASDAQ Commodity Benchmark Index Family. The NASDAQ Commodity Benchmark Index is designed to provide a broad and representative exposure to the commodity market by measuring the performance of 33 commodities based on commodity futures prices.
The new ETCs listed today are:
|Product Name||LSE Code|
|Boost WTI Oil 3x Leverage Daily ETP||3OIL|
|Boost WTI Oil 3x Short Daily ETP||3OIS|
|Boost Gold 3x Leverage Daily ETP||3GOL|
|Boost Gold 3x Short Daily ETP||3GOS|
|Boost Copper 3x Leverage Daily ETP||3HCL|
|Boost Copper 3x Short Daily ETP||3HCS|
|Boost Natural Gas 3x Leverage Daily ETP||3NGL|
|Boost Natural Gas 3x Short Daily ETP||3NGS|
|Boost Silver 3x Leverage Daily ETP||3SIL|
|Boost Silver 3x Short Daily ETP||3SIS|
The ETCs are designed to return 3x the daily movement, long or short, of the relevant benchmark index. For example, if the NASDAQ Commodity Crude Oil index rises by 1% on a particular day, then “3OIL” will rise by 3% and “3OIS” will fall by 3%. However, if the NASDAQ Commodity Crude Oil index falls by 1% then “3OIL” will fall by 3% and “3OIS” will rise by 3% (less fees and adjustments).
The listing of the ten new 3x leveraged and 3x short ETCs follows closely on the heels of BOOST listing ten equity ETPs earlier in December, which track leading equity benchmarks for the UK, Germany, Europe and the US. Assets Under Management (AUM) currently stand at approximately $18 million.
Demand for transparent leveraged and short products has increased over the past few years with global leveraged and short ETP assets rising to $43bn as many financial markets have trended sideways, resulting in volatile but poor long term returns. Leveraged and short ETPs make it possible to take advantage of this short term volatility in world financial markets. Additionally, there is more than $200bn of assets in ETCs globally, providing exposure to the world’s leading commodity markets,
BOOST’s Co-CEO, Hector McNeil comments:
“The ten new 3x leveraged and 3x short ETCs are valuable additions to our platform, providing access to some of the most liquid commodity market benchmarks. It is important that BOOST provides a comprehensive multi asset platform for investors so that they can access the markets they want and to take advantage of trading and hedging opportunities as they occur. We are very excited at being able to offer 20 new products within two weeks.
By adding commodity products to equities in such a short space of time BOOST is clearly showing its ability to innovate and bring added value investment products to the market. Investors can now trade cross asset class actively when needed.”
To highlight the potential opportunities now available as a result of short and/or leveraged ETPs, the average daily change in the NASDAQ Commodity HG Copper Index ER, was 1.66% per day, over the past five years (to 30 November 2012). By comparison, a buy and hold investment in the index over the same 5 year period returned 8.53% (before fees), equating to 1.65% p.a.. The table below shows that the daily absolute change in each index was in the range of 1.00% to 2.25% per day.
|Index4||Average daily change (absolute change)|
|NASDAQ Commodity Crude Oil ER||1.82%|
|NASDAQ Commodity Natural Gas ER||2.25%|
|NASDAQ Commodity Gold ER||1.00%|
|NASDAQ Commodity Silver ER||1.87%|
|NASDAQ Commodity HG Copper ER||1.66%|
BOOST specialises in providing sophisticated investors with leveraged and short ETPs which gives investors instant exposure to highly liquid underlying markets in one single trade. Investors can now get simple exposure to leveraged returns without having to borrow the additional funds to gain the additional long exposure, or the need to borrow the underlying shares and then sell those shares in order to short the market. BOOST will be providing significant educational support to the investment community with the aim of ensuring investors can maximise their usage of BOOST ETPs.
BOOST has an investor conference call scheduled for Thursday 10 January 2013, at 15:00-15:45 GMT. Hector McNeil will be hosting the call where he will explain the benefits of BOOST's 3x leveraged and 3x short ETPs, and offer an overview of the 2012 market and views on 2013 ETP trends. There will be a Q&A session for participants at the end of the call. For further information, please email email@example.com.
BOOST’s new ETPs will help expand the investment horizons of investors and will allow them to execute a wide variety of strategies which will 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 will 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 will be 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.