Boost launches Europe’s first short and leveraged palladium ETCs

Jul 12th, 2013 | By | Category: Commodities

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Boost, a London-based provider of short and leveraged exchange-traded products (ETPs), has listed nine new exchange-traded commodities (ETCs) on the London Stock Exchange.

Boost launches Europe’s first short and leveraged palladium ETCs

Boost has launched Europe’s first exchange-traded products to offer short and leveraged exposure to palladium.

The new ETCs are linked to indices from Nasdaq OMX’s commodity index family and include Europe’s first short and leveraged palladium products.

Palladium, a platinum group metal (PGM), is a major input into the production of catalytic converters, with approximately two-thirds of world supply consumed by the automotive industry. With light vehicle production soaring thanks to the growth of consumer classes in emerging markets, the demand for palladium is expected to remain strong.

However, concerns over depleted stock levels in Russia, labour disputes in South Africa, and rising production costs have translated into a global palladium supply shortfall of around 6%. These fundamentals have led to the price of palladium rising over the past few years, with the metal up about 80% since 2008. Recently, though, concerns about emerging market growth prospects and talk of a tightening of monetary policy in the US have pushed the price of palladium down around 6% year to date.

Boost’s new palladium products, the Boost Palladium 1x Short Daily ETP (1PAS) and Boost Palladium 2x Leverage Daily ETP (2PAL), which offer short and leveraged exposure to palladium respectively, allow investors to capitalise on these price moves – whether positive and negative. For example, if palladium rises by 1% on a particular day, then the Boost Palladium 2x Leverage Daily ETP (2PAL) will rise by 2% and the Boost Palladium 1x Short Daily ETP (1PAS) will fall by 1%. However, if palladium falls by 1%, then 2PAL will fall by 2% but 1PAS will rise by 1% (excluding fees).

For conventional long-only exposure to palladium, investors could consider the ETFS Physical Palladium (PHPD) from ETF Securities, the Source Physical Palladium P-ETC (SPAL) from Source, or the db Physical Palladium ETC (XPAL) from Deutsche Bank, all listed on the London Stock Exchange.

In addition to 1PAS and 2PAL, Boost has also added complementary products to its existing long and short commodity suite with new products offering a range of -1x , -2x and 2x exposure to gold, silver and natural gas. In total, Boost’s product offering now includes 25 ETCs and 17 equity ETPs.

Hector McNeil, Co-CEO of Boost, said: “We have worked very closely with Nasdaq OMX on the listing of our new products. Since 2008, the palladium price has risen 80%, despite copper and aluminium prices falling by 2% and 25%, respectively. China’s growth, the developments in the autocatalytic converter market for cars, and the rebound in the world economy, makes palladium a very interesting metal for investors.”

John Jacobs, Head of Nasdaq OMX Global Indexes, added: “Boost ETP has again succeeded in leveraging our indexes to quickly and efficiently develop innovative products for a wide range of investors.”

Boost’s new products are:

Boost Palladium 1x Short Daily ETP (1PAS)
Boost Palladium 2x Leverage Daily ETP (2PAL)
Boost Gold 2x Short Daily ETP (2GOS)
Boost Gold 1x Short Daily ETP (1GOS)
Boost Gold 2x Leverage Daily ETP (2GOL)
Boost Silver 2x Short Daily ETP (2SIS)
Boost Silver 2x Leverage Daily ETP (2SIL)
Boost Natural Gas 2x Short Daily ETP (2NGS)
Boost Natural Gas 2x Leverage Daily ETP (2NGL)

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