ETF Securities launches 3x short and leveraged FTSE 100 ETPs

Apr 8th, 2014 | By | Category: Alternatives / Multi-Asset

ETF Securities, a London-headquartered global provider of exchange-traded products (ETPs), has launched two new products on the London Stock Exchange offering 3x short and leveraged exposure to the FTSE 100 index.

ETF Securities launches 3x short and leveraged FTSE 100 ETPs on LSE

ETF Securities’ latest products offer triple leveraged long and short exposure to the FTSE 100 index of leading London-listed companies.

The ETFS 3x Daily Long FTSE 100 (UK3L) is designed to enable investors to gain a three times daily leveraged ‘long’ exposure to FTSE 100 by tracking the FTSE 100 Daily Super Leveraged RT TR Index.

The ETFS 3x Daily Short FTSE 100 (UK3S) is designed to enable investors to gain a three times daily leveraged ‘short’ exposure to FTSE 100 by tracking the FTSE 100 Daily Ultra Short Strategy RT Gross TR Index.

A three times daily leveraged long exposure means that the product is designed to reflect three times the daily percentage change in the reference index. For example, if the FTSE 100 were to rise in value by 2% on a particular day, the product would increase in value by 6% on that day (before fees, expenses and adjustments).

Similarly, a three times daily leveraged short exposure means that the product is designed to reflect minus three times the daily percentage change in the index. So, if the FTSE 100 were to rise in value by 2% on a particular day, the product would decrease in value by 6% on that day (before fees, expenses and adjustments).

The new products complement ETF Securities’ existing platform of short and leveraged ETPs, which was introduced in 2008 and has grown to approximately $1.4bn of assets under management (AUM).

The platform is the third largest in Europe and offers short and leveraged exposure to a range of commodities, equities and currencies. Year to date, the platform has seen net inflows of approximately $65m. Globally, AUM in short and leveraged ETPs has soared from $9bn in 2006 to more $60bn today.

Alongside the rollout of new products, ETF Securities is developing its range of educational material available to investors who wish to use short and leveraged ETPs. Most recently, the provider launched a new web page providing a guide to short and leveraged commodities, as well as a simulator tool intended to help investors better understand the risks and returns provided by short and leveraged ETPs.

Townsend Lansing, Head of Short and Leveraged Platform, ETF Securities, commented: “We have seen tremendous growth in both our platform and in short and leveraged products globally over the past 8 years. Our current range of equity products is popular with investors, with a 12-month average daily volume of over $20m.”

He added: “We are excited to expand our range of short and leveraged ETPs and provide investors with additional tools to take short term views and make tactical trades. We believe these products provide opportunities to trade on a short term basis with a competitive total cost of ownership.”

This latest product offering reflects ETF Securities’ intention to diversify its core business beyond commodities.

Both new products come with a total expense ratio (TER) of 0.82%.

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