Short and leveraged ETP assets up 10% to $48.5bn

May 21st, 2013 | By | Category: Alternatives / Multi-Asset

Global short and leveraged exchange-traded product (ETP) assets rose by $4.4 billion in the first four months of 2013, to $48.5 billion, according to data released by Boost ETP, a London-based provider.

Short and leveraged ETP assets up 10% to $48.5 billion

Nik Bienkowski, Co-CEO of Boost ETP.

The growth in assets is a reflection, in part, of the increased breadth and depth of products available, improved education and understanding, and a general move by investors towards more transparent, exchange-traded products.

As well as seeing increased assets under management (AUM), on-exchange traded volumes for these products also increased, rising from $113 billion to $160 billion per month.

On average, each of the 700 or so short and leveraged ETPs in existence globally trade on average an amount equal to 3.3 times their total AUM each month, suggesting that the products are being used for short-term and tactical trading by investors.

On average, 3x ETPs are being held for approximately 3 days, 2x ETPs for 8 days and -1x ETPs for 14 days.

Of the $48.5 billion of AUM held by short and leveraged ETPs, 69% of assets are linked to equity indices, 17% to fixed income indices, 9% to commodities indices and 2% to FX indices. 57% of all assets are in short ETPs.

Nik Bienkowski, Co-CEO of Boost ETP, which specialises in 3x long and short ETPs, said: “Global AUM in short and leveraged ETPs is approaching an all-time high of close to $50 billion, after increasing by $4.4 billion this year. Continued inflows show that short and leveraged ETPs are useful tools for investors, not least because they can be used to hedge portfolios or profit in falling markets.”

Leading providers in the short and leveraged ETP space include ProShares, Direxion, VelocityShares, ETF Securties and PowerShares.

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