Boost ETP has listed nine new exchange-traded commodities (ETCs) on the London Stock Exchange.
These new ETCs will track indices from the Nasdaq Commodity Index Family. 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 per cent of world palladium supply, primarily for making catalytic converters. As the number of light vehicle cars is expected to grow by 23 per cent 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 six per cent.
Year-to-date (to 30 June) palladium is down 6.4 per cent. In comparison, copper and aluminium are down 14 per cent while silver, a precious metal with significant industrial use, is down 35 per cent. Since 2008 however, palladium is up 80 per cent while copper and aluminium have fallen by two per cent and 25 per cent, 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 Family. For example, if palladium rises by one per cent on a particular day, then Boost Palladium 2x Leverage Daily ETP (2PAL) will rise by two per cent and Boost Palladium 1x Short Daily ETP (1PAS) will fall by one per cent. However, if palladium falls by one per cent, then 2PAL will fall by two per cent and 1PAS will rise by one per cent.
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 strong performers. YTD Boost Silver 3x Short Daily ETP (3SIS) is up 128 per cent and Boost Gold 3x Short Daily ETP (3GOS) is up 130 per cent.