Short and leverage exchange traded product provider BOOST ETP has listed six more ETPs on Borsa Italiana following its successful listing of 14 ETPs and ETCs on the exchange in Q4 of 2013.
In total, BOOST ETP has listed 20 ETPs on Borsa Italiana, bringing BOOST’s total listings to 64 in the UK and Italy.
The new ETPs and ETCs available on Borsa Italiana are:
Boost NASDAQ 100 3x Short Daily ETP (QQQS)
Boost NASDAQ 100 3x Leverage Daily ETP (QQQ3)
Boost US Large Cap 3x Short Daily ETP (3USS)
Boost US Large Cap 3x Leverage Daily ETP (3USL)
Boost Natural Gas 2x Short Daily ETP (2NGS)
Boost Silver 2x Short Daily ETP (2SIS)
Demand for transparent, liquid and robust S&L ETPs has increased over the past few years with global S&L ETP assets rising to a record of USD56bn (BOOST Short and Leverage ETF/ETP Global Flows Report, 31 Jan 2014). There has been a rise in demand since October 2013 as volatility in global equity markets has risen, with BOOST’s AUM having also risen to a record of circa USD78 million, up around 200% in the past four months. BOOST’s most popular indices are FTSE MIB and Natural Gas with USD15 million and USD19 million of AUM, or around USD45 million and USD55 million, respectively after taking leverage into account.
Volumes across BOOSTS’s platform have risen to an average of USD10 million per day, having increased by 2,000% since June 2013. In January, the most popular BOOST ETP was the BOOST Natural Gas 3x Short Daily ETP (3NGS), which comprised 27% of total BOOST turnover. In Italy, Boost has gained around 17% market share in less than four months, with Natural Gas and Silver two of the top three traded ETPs in Borsa’s ETC segment of ETFplus.
While the extreme cold weather affecting large parts of the US this year boosted demand for heating fuels, it caught US gas suppliers by surprise, having had to rely heavily on existing gas inventories to meet demand. In 2013, the BOOST NASDAQ 100 3x Leverage Daily ETP (QQQ3) rose by 136% (to 31.12.13) while in the past 3 months, Boost Natural Gas 100 3x Leverage Daily ETP (3NGL) rose by 147% (to 20.2.14).
The US’s second tapering announcement, China’s unexpected contraction in manufacturing and Europe’s bank stress test coming on the heels of more capital raising has briefly cut short the rally in equities during the second half of January. While the souring sentiment on risk assets had caused investors to seek shelter in safe havens assets such as gold and US Treasuries, leveraged short positioning in US equities would have created efficient hedging for investors. For example, from 16 January to 31 January, 2014, when the Russell 1000 and the NASDAQ 100 fell 3.4% and 2.4%, respectively, the Boost Russell 1000 3x Short Daily ETP (3USS) and Boost NASDAQ 100 3x Short Daily ETP (QQQS) returned 10.2% and 7.0%, respectively.
BOOST is the first ETP/ETC issuer of 3x Short and 3x Leveraged ETPs on the Borsa Italiana ETFplus market. BOOST’s triple leverage ETPs are designed to return 3x the daily movement, long or short, of the relevant benchmark index. For example, if the NASDAQ 100 Index rises by 1% on a particular day, then “QQQS” will fall by 3% and “QQQ3” will rise by 3% (before fees and other adjustments). However, if the NASDAQ Gold Index falls by 1% then “QQQ3” will fall by 3% and “QQQS” will rise by 3% (before fees and other adjustments).
Throughout 2013, BOOST has worked hard to develop its educational materials to help investors understand the S&L ETP/ETF structure, its benefits and risks. BOOST has developed educational tools such as the ‘Adviser/Investor Tool Kit’ which includes a Tutorial and Test, a Returns Simulator, various fact sheets and FAQs. BOOST also provides regular conference calls and face to face educational sessions for investors. These tools and events are also be offered to Italian investors.
Co-CEO of BOOST ETP, Nik Bienkowski (pictured), says: “BOOST has seen significant activity already in its flagship Italian ETPs including the Boost FTSE MIB 3x Leverage Daily ETP (3ITL) and Boost FTSE MIB 3x Short Daily ETP (3ITS). We also saw significant interest in Boost Natural Gas 3x Leverage Daily ETP (3NGL) and Boost Silver 3x Leverage Daily ETP (3SIL). To gain around 17% market share for the Borsa Italiana ETP Plus ETC/ETP segment in less than 4 months of trading is spectacular. With record trading volumes and Assets Under Management, this is proof of investor demand for well-constructed and highly liquid investment products such as Boost ETPs”.
