Boost proved to be the S&L platform of choice for trading oil and natural gas…
Nik Bienkowski, Co-CEO of WisdomTree Europe
• With the price of oil hitting $44/bl, Boost’s S&L Oil ETPs traded nearly $500m in notional volume in January, 20% more than any other issuers’ S&L ETPs
• Boost’s S&L Natural Gas ETPs had $375m of notional volume, more than twice as much as any other issuer
• Total notional volume across the Boost platform hit a record of $1,547m in January
• The most recent rise in volume coincides with increased concerns about CFD and spread betting firms going bust
WisdomTree Europe, announces that its range of short and leveraged Oil and Natural Gas ETCs are now the most liquid in Europe. Boost’s ETCs are listed on the LSE, Borsa Italiana and the Frankfurt Stock Exchange.
Boost’s ETPs hit a new record of $518m in trading volume in January, adding up to a notional volume exceeding $1.5bn. The new record comes against the backdrop of a rise in market volatility and increasing concerns over the robustness of spread betting and CFD firms, a few of which have entered administration or frozen client accounts over the past month.
Trading volumes in Boost’s platform have been on a clear growth trend, more than tripling over the past 6 months. As January closed, Boost reached a record of $201m in AUM,1 or $592m in notional terms. This growth suggests that Boost S&L ETPs are not only becoming the product of choice among other ETPs, but also increasingly gaining market share against other product types such as CFDs, spread bets, warrants, certificates and structured products. ETPs lead the way in counterparty risk management offered through their collateral, and draw investor appeal due to their exchange- traded advantages, as well as their simplicity versus other leveraged offerings, since investors cannot lose more than their original investment in an ETP or face their positions being closed automatically due to margin requirements.
BOOST’s growth has been driven by product innovation and a focus on proactively educating investors about the benefits and risks of using S&L ETPs. The many different investment strategies that investors can employ also add to the usefulness of the product. Boost now offers ETPs covering all the major indices across equities, commodities, fixed income and currencies, having recently launched 3x short and 3x leveraged Fixed income ETPs and also a 5x short and 5x leveraged EUR- USD ETP. In total, BOOST ETP’s product range totals of 95 listings on Borsa Italiana, the London Stock Exchange, and Germany’s Xetra.
Nik Bienkowski, Co-CEO of WisdomTree Europe commented: “The 87% growth in AUM and 266% growth in trading volumes in BOOST ETPs over the past 6 months is very impressive. It clearly shows that investors have a strong appetite for robust and transparent short & leveraged investment vehicles. With increased volatility and the recent float of the Swiss Franc versus the Euro, Boost’s collateralised structure has shone above other product structures.
Having launched the Boost platform in December 2012, Boost now boasts the most liquid short and leveraged platform in Europe for trading oil and natural gas. With the recent crash in oil from $98/bl to $48/bl over the past 6 months2, our clients were at first looking to profit from falling oil prices, however more recently, renewed interest in 3x leveraged oil appears to indicate that investors are becoming less bearish on oil prices.”
Viktor Nossek, Director of Research at WisdomTree Europe, commented: “The sharp down trajectory in oil since the summer of last year stood out as the main macro event underpinning commodities. Investors would have benefited from using geared short ETPs tracking oil as means to efficiently position bearishly around crude oil’s price slump. For instance, in December of 2014 oil futures fell 20% and in January they fell by another 10%. Over the same period, BOOST WTI Oil 3x Short Daily ETP (3OIS), returned 167% (from 1 Dec 2014 to 30 Jan 2015), demonstrating once again that geared short ETPs are capital efficient investments in down trending markets. Geared short ETPs can amplify returns of investors desiring opportunistic bearish positioning, as well as enable them to build hedges to protect long positions over several weeks and even months to ride out the storm. »