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Leverage Shares becomes first European provider to offer 0% fee on equity ETPs


ETF issuer Leverage Shares has cut the management fees to zero on its ETPs that provide short exposure to Tesla.

The affected ETPs are:
• Leverage Shares -3X Short Tesla ETP (XS2337090265)
• Leverage Shares -2X Short Tesla ETP (XS2297550134)
• Leverage Shares -1X Short Tesla ETP (IE00BKT6ZH01)

The firm writes that this makes Leverage Shares the first issuer to offer 0bps (0 per cent) management fees on equity ETPs in Europe. This “fee holiday” will be maintained for at least six months until 30 September 2022, with a possibility of extending it, the firm says.

Leverage Shares writes that it is the only provider in Europe that offers physical replication of short and leveraged ETPs. Among its listings is the Leverage Shares 3x Tesla ETP, the most traded stock on the London Stock Exchange (based on number of trades) in 2022, and the more recently launched Leverage Shares 3x short and long ARK Innovation ETPs.

Despite Tesla shares experiencing an impressive rally this year, some investors believe that shares are trading at a valuation that is removed from fundamentals.

The firm writes that its short and leveraged ETPs are an efficient way for investors to trade with conviction and mitigated risk as they do not require a margin account. In this way the downside is limited only to the amount invested.

Raj Sheth, commercial director at Leverage Shares, says: “We wanted to make our investors aware that, at this frothy Tesla prices, our short Tesla ETPs can be useful tools to hedge any long-term exposures to Tesla or to profit more tactically from price drops. Our 3x Tesla ETP is the most traded ETP on the LSE (by number of trades), but investors should have our full product suite at their disposal and pivot between long and short positions as their conviction dictates.”

Other popular ETPs include 3x leveraged ETPs of Microsoft (MSF3), Alphabet (GOO3), NIO (NIO3), Meta (3FB), Netflix (NFL3) and 2x leveraged Berkshire Hathaway (BRK2) as investor interest has recently been targeted towards leveraged versions of stocks hit hard during earnings season and by the big tech correction.

Leverage Shares other ETPs mimic the daily return of an underlying asset multiplied by a leverage factor of +5x, +3x, +2x, -1x, -2x and -3x. They provide leveraged exposure to globally popular names including Tesla, Berkshire Hathaway, Amazon, Alibaba, Microsoft and Netflix, as well as FTSE100 equities, such as Vodafone.

The ETPs are also listed on the London Stock Exchange, Euronext Paris and Euronext Amsterdam. Investors can trade a stock in their own time zone and currency (USD, EUR and GBP) without paying FX fees, even if the company is listed elsewhere.

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