STOXX has licensed the EURO STOXX Banks Daily Short 3 and Daily Leverage 3 indices to Boost to serve as the basis for exchange-traded products (ETPs) available on Borsa Italiana.
“As part of our innovative strategy index family, the EURO STOXX Daily Short 3 and Daily Leverage 3 indices provide sophisticated market participants leveraged exposure to the euro zone banks sector during bullish or bearish markets,” says Hartmut Graf, chief executive officer, STOXX Limited.
Nik Bienkowski, Co-CEO of WisdomTree Europe, says: “Against the backdrop of the ECB’s QE programme, bank stress tests and TLTROs, the EURO STOXX Banks Daily Short 3 and Daily Leverage 3 indices enable educated market participants to express their view at a time when Eurozone banks serve as the channel through which much of the EU’s policy is implemented. Boost is proud to partner again with STOXX to offer, for the first time in Europe, three times leveraged and short exposure to the heart of Eurozone’s financial system.”
The EURO STOXX Banks Daily Short 3 Index is linked to the performance of the EURO STOXX Banks Net Return Index in an inverse way – a negative movement in the EURO STOXX Banks Net Return Index will result in a triple positive change in the respective short index, and vice versa. For example, if the underlying index is down 1%, the EURO STOXX Banks Daily Short 3 Index will increase approximately by 3% plus interest (based on EONIA) earned on the investment.
The EURO STOXX Banks Daily Leverage 3 Index is directly linked to the performance of the EURO STOXX Banks Gross Return Index. A positive movement in the EURO STOXX Banks Gross Return Index results in triple the performance in the respective leverage index, and vice versa. For example, if the underlying index is up 1%, the EURO STOXX Banks Daily Leverage 3 Index will rise approximately by 3% minus interest paid to refinance the leveraged investment.