Boost ETP has launched the Short & Leveraged ETF/ETP Advisor Tool Kit, which has been designed to provide simple and easy to understand educational materials for anyone considering an investment in a short or leveraged ETF or ETP.
The toolkit comes in response to a number of concerns by global regulators regarding the use of leverage by investors.
In Europe, ESMA and the EBA are concerned that during the current period of low investment returns, inexperienced retail investors across the EU are being tempted to invest in complex financial products (such as CFDs and spread bets), which they may not fully understand and which can end up costing them money they cannot afford to lose.
Boost ETP launched its Short and Leverage ETP platform for exactly these reasons. It feels that education and transparency are key to any financial product, especially for those products which may either be perceived to be complex, may be short and/or leveraged, or may potentially behave differently from what an investor might expect.
Boost believes that adviser education, product training and transparency regarding a product’s risks are vital to investors’ ability to evaluate whether a product, such as a short or leverage ETP is suitable for the investor’s goals, objectives and financial position. As a result, Boost’s Short & Leveraged ETF/ETP Advisor Tool Kit includes some of the materials listed below, and is continuously being updated:
· Fact sheets explaining short & leveraged returns and compounding
· A short & leveraged return simulator, in the form of a downloadable Excel file
· Presentations, conference calls and seminars on how to use short & leveraged ETFs/ETPs, some of which have been accredited for Continuous Professional Development
· Trade ideas on how to use short & leveraged ETFs/ETPs in the current market
Nik Bienkowski (pictured), co-chief executive of Boost, says: “Boost ETP has been surprised by the response from Europe’s financial advisors interested in using short & leveraged ETPs but have not had the tools to enable them to understand the products fully. As a new independent provider, Boost ETP is committed to providing Professional investors with the tools they need, regardless of whether the end investor is planning to purchase a Boost ETP, or other product.
“It’s clear that there is demand for short and leveraged products given the growth in these types of ETPs, and the wide use of other types of short and leveraged products. Used in the right way, they can benefit an investor’s portfolio. Global short and leveraged ETP assets have risen to USD48.5bn as many financial markets have trended sideways, resulting in volatile but poor long term returns. Short and leveraged ETPs make it possible to take advantage of this short term volatility in world financial markets.
“The global ETP market has now grown to more than USD2trn and will continue to grow. This means that the availability of products will increase, as will the types of ETPs. Strategies previously not available in ETP format, such as short and leverage, or commodities, will slowly make their way into the ETP format. With the current market environment, such as RDR and a move to Exchange Traded Products, we expect an increase in the use of ETPs, and Boost ETP along with its Short & Leveraged ETF/ETP Advisor Tool Kit, is perfectly positioned to participate in this increased demand.”