Global S&L AUM remains at around $51bn, up nearly $7bn this year, despite falls in AUM of non-leveraged products; Equity investors were mixed. US equities experienced inflows into both short and long S&L ETPs, while Europe was bearish….
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Overall, the average leverage factor for equity ETPs fell; Fixed income investors are unanimously bearish.
Commodity ETP investors were bullish on gold and natural gas, and bearish on copper and oil
S&L ETP investors were also bearish on silver, despite Boost Silver 3x Leverage Daily ETP being the top performing ETP on the LSE in August
Boost ETP, the award winning and independent exchange-traded product (ETP) provider, has released its Global Short & Leverage ETF / ETP report for August. Global Short and Leveraged ETP assets have risen by $6.8bn (15%) in the first eight months of 2013 to $51.1bn, as investors continue to increase their usage of Short and Leveraged (S&L) ETPs. Demand for S&L ETPs was also supported by Boost ETPs’ AUM, having doubled between June and end of August.
Of the $51.1bn of AUM currently held by S&L ETPs globally:
• $35.1bn is held in S&L equity ETPs. In August, S&L equity investors increased both long positions and short positions, however there was $1.5bn of net long notional flows.
• Equity ETPs: $4.3bn of AUM is held in S&L equity ETPs tracking Europe or European countries, of which 54% is held in short ETPs. During August, nearly all the major European equity indices experienced outflows from long ETPs and flows into short ETPs, resulting in net short notional flows.
• Fixed income ETPs: $9.1bn is held in S&L fixed income ETPs, of which 98% is held in short ETPs, which is consistent with a strong expectation of rising interest rates.
• Commodity ETPs: $4.6bn is held in S&L commodity ETPs, of which 59% is held in long commodity ETCs and 41% is held in short commodity ETCs. Investors are currently bullish on gold, silver, copper and natural gas, and bearish on oil.
• Energy ETPs: since May, investors have placed net notional short positions of nearly $2bn in oil and $945m long on natural gas.
On-exchange traded volumes for S&L ETPs have also increased this year although volumes were down for the summer months. 3x ETPs are being held for approximately 3 days, 2x ETPs for 10 days and -1x ETPs for 15 days suggesting that many investors are using S&L ETPs for short-term trading and hedging.
Boost ETP is also experiencing rising investor demand for its robust and transparent S&L ETPs. Recently, a single investor traded $19 million of Boost EURO STOXX 50 3x Short Daily ETP (3EUS) which was the equivalent to a total notional exposure value of $57 million. Recently, trading volumes of Boost ETPs have risen dramatically with increased interest in products providing exposure to short oil, short EURO STOXX 50, leverage FTSE 250 and leverage FTSE 100. Continuing inflows into the Short and Leverage ETP market show that these types of products are useful tools for investors, not least because they can be used to hedge portfolios or profit in falling.
Source: ETFWorld.co.uk -BOOST ETP
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