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PRESS ROOM

S&L Investors Driving Equities and Commodity Flows, According To Q4 2015 BOOST ETP’s Industry Report

Monday 08th February '16

• Global slowdown fears reinvigorate investor appetite in short and leveraged (S&L) Exchange Traded Products (ETP) as equities and commodities slump
• Global AUM of S&L ETPs continues to hold steady at near record highs of $68.3 billion or +14% for 2015 
• S&L investors reallocated bullishly to US and European equities with conviction: creations in long ETPs coincided with redemptions in short ETPs tracking major benchmarks 
• Flow into Japanese equities continued to strengthen with investors taking both long and short positions (total of $870m). S&L ETPs tracking Japanese equities now stand at over $5.2 billion. 
• Downbeat sentiment on China’s outlook overwhelmed an upbeat Fed: S&L investors cut their bearish positions in US debt by $260 million accordingly. 
• Contrarian bets from S&L investors in response to crashing commodity prices drove $725 millions of inflows into long ETPs tracking crude oil. 

London, 3 Feb 2016: BOOST ETP, Europe’s award winning, specialist Short and Leverage (S&L) Exchange Traded Product (ETP) provider has released its quarterly December 2015 Short & Leveraged ETFs/ETPs Global Flows Report. According to the report, AUM of S&L ETPs at the end of December remains close to record highs at $68 billion, up 14% in 2015 as investors globally continue to increase their usage of S&L ETPs. 
Investors in S&L ETPs can express bullish as well as bearish sentiment by investing in either a leveraged or a short ETP. Thus the AUM of S&L ETPs can reveal a broader range of investor sentiment than flows or AUM data for mutual funds and other ETPs. Since S&L ETPs tend to be held for shorter periods and used more for tactical positioning, AUM and flows data for S&L ETPs can provide valuable insight into the market sentiment of a relatively sophisticated set of investors. The BOOST Short & Leveraged ETFs/ETPs Global Flows Report highlights the key flows and trends in S&L ETPs across asset classes and geographies.

Nick Leung, Research Analyst at WisdomTree Europe, commented: 
“December capped a record year for short & leveraged ETPs as investors took advantage of persistent volatility to position opportunistically or hedge their exposures. 
The build-up of bearish sentiment on fixed income, following the much anticipated first Fed rate hike since 2006, was cut short by China’s slowdown fears amidst falling industrial confidence pressuring the RMB. This triggered redemptions of $260 million on short ETPs tracking US debt, accelerating the unwinding of short positions that had built up in the first half of 2015. At the same time, investors in S&L equity ETPs responded to the Fed rate hike by repositioning bullishly in US and European equities, as evident by contrasting flows in long and short ETPs. 
Flows into Japanese equities continued to strengthen but the positioning was mixed, with an additional $870 million flowing into both long and short positions in equal measure last month. 2015 inflows into S&L ETPs tracking Japanese equities now stand at over $5.2 billion. S&L commodity ETPs also enjoyed substantial inflows of $710 million in December, underpinned by contrarian bets in response to the RMB devaluation raising geopolitical tensions in Asia.”

See the full report here: http://www.boostetp.com/Documents/12666/Monthly-Short-Leveraged-Flows-Report-2015-12.PDF  

About S&L ETPs 
Today S&L ETPs cover all major assets classes and geographies. In terms of asset allocation at the end of December, equity ETPs were the most popular with 72% of total AUM ($49.8 billion), followed by debt (12%, $8.0 billion) and commodities (9%, $6.0 billion). In equities, most of the AUM is focused on US large cap and US small cap equities ($17.5 billion), Asia-Pacific equities ($13.7 billion) and European equities ($5.9 billion). In Europe, broad European indices are the most popular ($2.3 billion in AUM), followed by Germany ($1.4 billion), Italy ($626 million) and France ($520 million). In debt, most of the AUM is in US government debt ($4.8 billion), German government debt ($1.4 billion), and Italian ($203 million) and European-region focused ($197 million) government debt. In commodities, oil is the most popular ($3.6 billion in AUM), followed by natural gas ($739 million), gold ($696 million) and silver ($539 million)

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 $52.4 billion (as of 31 December 2015) 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 

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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.