Short and leveraged exchange traded product provider Boost ETP has moved into the German market with the launch of four of its products on Deutshe Bourse’s Xetra.
The Boost ShortDAX 3x Daily ETP (3DES), Boost LevDAX 3x Daily ETP (3DEL), Boost EURO STOXX 50 3x Short Daily ETP (PCFC) and the Boost EURO STOXX 50 3x Leverage Daily ETP (PCFD) are now tradable on the German exchange.
Global short and leveraged ETP assets have risen to $60 billion in recent years, according to data from Boost ETP, as a result of financial markets moving sideways, resulting in volatile but poor long term returns. It has prompted investors to focus on tactical and hedging opportunities to ensure they preserve and grow their capital.
Leveraged and inverse products work by helping to boost market returns. Boost ETP’s products are designed to return 3x the daily movement, long or short, of the relevant benchmark index. For example, if the DAX rises by 1 percent on a particular day, then "3DEL" will rise by 3 percent and "3DES" will fall by 3percent. However, if the DAX falls by 1 percent then "3DEL" will fall by 3 percent and "3DES" will rise by 3 percent (less fees and adjustments).
Hector McNeil, Co-CEO of Boost ETP, A WisdomTree Company said in a statement: “Short and Leverage ETPs can be useful tools, allowing investors to hedge portfolios or take short terms views on the world’s major commodity and equity indices.”
Viktor Nossek, head of research at Boost ETP, added: “Underpinned by volatility within Eurozone banks and the recent fading economic growth momentum in Germany, S&L investors repositioned bearishly in German equities in June. The bearish conviction was evident by the inflows into -2x short ETPs that coincided with outflows from +2x leveraged (long) ETPs. Given the high beta of the German equity market and otherwise favourable valuations relative to peers in Europe, S&L investors’ downbeat sentiment in the DAX 30 is prone to potentially reverse itself as the situation surrounding Banco Espirito Santo gets overshadowed by more upbeat macro data elsewhere.”
Boost’s products are now available on the London Stock Exchange, Borsa Italiana and Xetra. It brings the provider's product range to a total of 68 listings across Europe.
Most recently, U.S. provider Wisdom Tree bought a majority stake (75 percent) in Boost ETP investing some $20 million in the provider.