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Europe’s first Short and Leveraged palladium ETCs

Thursday 11th July '13

  • First European 1x Short and 2x Leveraged palladium ETCs listed on LSE 
  • 7 new gold, silver and natural gas Short & Leveraged (S&L) ETPs added to existing 3x Short and 3x Leveraged ETCs
BOOST ETP the award winning and independent exchange-traded product (ETP) provider has listed nine new ETCs on the London Stock Exchange. These new ETCs will track indices from the NASDAQ Commodity Index FamilySM. For the first time, ETCs tracking palladium will be available in Europe: Boost Palladium 1x Short Daily ETP (1PAS) and Boost Palladium 2x Leverage Daily ETP (2PAL). 

The automotive sector consumes approximately 67% of world palladium supply, primarily for making catalytic converters. As the number of light vehicle cars is expected to grow by 23% to exceed 100 million by 2017, the demand for palladium in both developed and emerging market economies is expected to remain strong. Moreover, concerns over depleted stock levels in Russia, labour disputes with mine workers in South Africa and an industry under pressure to consolidate as production costs exceed palladium spot price have translated into a global palladium supply shortfall of 6% . 
YTD (to June 30th) palladium is down 6.4%. In comparison, copper and aluminium are down 14% while silver, a precious metal with significant industrial use, is down 35%. Since 2008 however, palladium is up 80% while copper and aluminium have fallen by 2% and 25%, respectively. If industrial metals have largely been a play on China, palladium has been reaping the rewards of its application in innovative technologies and jewellery production.
The new ETPs provide S&L exposures to daily changes in the indices from the NASDAQ Commodity Index FamilySM. For example, if palladium rises by 1% on a particular day, then Boost Palladium 2x Leverage Daily ETP (2PAL) ) will rise by 2% and Boost Palladium 1x Short Daily ETP (1PAS) will fall by 1%. However, if palladium falls by 1%, then 2PAL will fall by 2% and 1PAS will rise by 1%.
In addition, Boost is launching additional leverages (-2x and 2x, and also -1x for gold) to complement its existing suite of ETCs tracking gold, silver and natural gas. Gold, silver and natural gas have been some of the most heavily traded ETCs in Europe, and now with a wider range of leverages available, investors’ choice of investment strategies has been broadened.,
Given the recent collapse in precious metal prices, Boost’s range of 3x short and 3x leverage ETCs have been extremely strong performers. YTD Boost Silver 3x Short Daily ETP (3SIS) is up 128% and Boost Gold 3x Short Daily ETP (3GOS) is up 130% .
Demand for transparent Short and Leveraged (“S&L”) ETPs has increased over the past few years with global S&L ETP assets rising to $51bn , as many financial markets have trended sideways, resulting in poor long term returns. 
Boost ETP’s new ETCs are:
Product  LSE Code  Leverage Factor 
Boost Palladium 1x Short Daily ETP 1PAS -1x
Boost Palladium 2x Leverage Daily ETP 2PAL +2x
Boost Gold 2x Short Daily ETP 2GOS -2x
Boost Gold 1x Short Daily ETP 1GOS -1x
Boost Gold 2x Leverage Daily ETP 2GOL +2x
Boost Silver 2x Short Daily ETP 2SIS -2x
Boost Silver 2x Leverage Daily ETP 2SIL +2x
Boost Natural Gas 2x Short Daily ETP 2NGS -2x
Boost Natural Gas 2x Leverage Daily ETP 2NGL +2x
Boost’s product platform now includes 25 ETCs and 17 equity ETPs. BOOST has added multiple leverage factors based on investor demand and pursued a strategy of adding value through its comprehensive platform of ETC and ETP - range for investors. Boost is focusing heavily on providing in-depth educational materials and tools aimed at helping investors understand S&L ETFs and ETPs. Recently Boost introduced the Boost Advisor Tool Kit, which includes the Boost Advisor Tutorial and TestS&L returns simulator and a number of educational fact sheets
Hector McNeil, Co-CEO, commented: 
“We have worked very closely with NASDAQ OMX on the listing of our new products. Since 2008, the palladium price has risen 80%, despite copper and aluminium prices falling by 2% and 25%, respectively. China’s growth, the developments in the autocatalytic converter market for cars, and the rebound in the world economy, makes palladium a very interesting metal for investors. Boost Palladium 1x Short Daily ETP (1PAS) and Boost Palladium 2x Leverage Daily ETP (2PAL) will be valuable additions to investors’ investment opportunity set. With the addition of new leverage factors in gold, silver and natural gas, we continue to add further depth to the Boost platform.”
John Jacobs, NASDAQ OMX EVP and Head of NASDAQ OMX Global Indexes commented:
“Boost ETP has again succeeded in leveraging our indexes to quickly and efficiently develop innovative products for a wide range of investors.”