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Bears defeat bulls in ETF Securities’ double leveraged and double short debut

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ETF Securities says it experienced a surge in trading volume during the first week of trading its double leveraged (2x) and double short (-2x) ETFs on the London Stock Exchange.

ETF Securities says it experienced a surge in trading volume during the first week of trading its double leveraged (2x) and double short (-2x) ETFs on the London Stock Exchange.

The new ETFs, which track indices such as the FTSE 100 and the Dow Jones Euro Stoxx 50, saw over 230,000 shares traded and experienced a volume of GBP26m during their debut week. 

As the European equity markets ended the week lower, double short ETFs benefited with FTSE 100 Super Short Strategy (2x) up 4.7 per cent and ETFS Dow Jones Euro Stoxx 50 Double Short (2x) Fund up 3.1 per cent.

Double leveraged and double short ETFs also benefitted from the continuous fall in equity market volatility since the beginning of the year with the VIX index falling 54 per cent since mid January 2009.

Hector McNeil, head of sales and marketing at ETF Securities, says: “We have been blown away by the response to these products, the trading volumes have far exceeded our expectations. Investor response so far has been excellent and people have been impressed by the innovative nature of these products and how they add value to investment portfolios. Active investors like the fact they can get leveraged exposure, long and short through a transparent, cost effective and very liquid ETF. Bid offer spreads have also been impressive hovering between 15 to 20 bps. These products are great tools for investors and we think the FTSE 100 short and leveraged ETFs could become the most traded on the LSE.” 

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