Global short and leveraged exchange-traded product (ETP) assets rose by $4.4bn in the first four months of 2013, to $48.5bn, according to data released by 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.
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The UK Financial Conduct Authority has approved BATS Global Markets’ application for its BATS Chi-X Europe platform to be granted Recognised Investment Exchange (RIE) status. The new status, which takes effect on 20 May 2013, means BATS will be able to compete against mainstream European exchanges, such as the London Stock Exchange, NYSE Euronext and Deutsche Borse, for primary listings of exchange-traded funds (ETFs).
Despite price gains across a range of commodities last week, many commodity investors remain deeply cautious and indeed bearish. This has led many to allocate capital to specialist short exchange-traded products (ETPs), which last week enjoyed one of their best ever weeks on record, in terms of asset flows. London-headquartered ETF Securities saw particularly strong inflows into its gold and copper-based products.
Nasdaq OMX, a major global exchange operator, has outlined plans to re-launch the PSX exchange in an effort to create a leading marketplace for exchange-traded products (ETPs). The re-launch is expected sometime this month, pending approval by the US Securities and Exchange Commission. Upon re-launch, the price-time exchange will offer unique market-making programmes and features designed to provide robust liquidity to institutional and retail investors.
ETF Securities believes that the commodity super-cycle is far from over, despite recent falls in commodity prices which have wiped billions off the firm’s assets under management. The London-headquartered exchange-traded product (ETP) provider asserts that the main fundamental drivers of the super-cycle are still in force and that recent commodity price weaknesses are more related to business-cycle fluctuations and short-term commodity-specific supply increases than a change in structural fundamentals.
Expectations of a recovery for gold are mixed, according to a survey of Barclays Stockbrokers clients. Just under a third of respondents think the value of gold will bounce back above $1,500/oz in the next six months, while more than a quarter expect it to drop below $1,300/oz. The broker also revealed that the top five traded exchange-traded commodities (ETCs) in the week following the metal’s dramatic fall were all related to precious metals, comprising three gold ETCs – led by ETF Securities’ ETFS Physical Gold (PHAU) – and two silver ETCs.
Exchange-traded funds (ETFs) and related exchange-traded products (ETPs) linked to the inverse performance of the gold price have surged over the past few weeks as the precious metal has tumbled following downgrades from a number of prominent research houses. One of the best performing ETPs in this space is the London-listed Boost Gold 3x Short Daily ETP (3GOS), which provides triple short exposure to the gold price. It is up 48.5% month-to-date on the back of the dramatic sell-off.
Markit, a leading provider of fixed income indices, has announced the launch of the Markit iBoxx US Non-Agency RMBS Indices, a family of cash bond indices based on a portfolio of US non-agency Residential Mortgage-Backed Securities (RMBS). The new indices provide market participants with a means to assess the returns of the US non-agency RMBS market and are well suited for use a fund benchmarks and underlyings for index-linked products such as exchange-traded funds (ETFs).
The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) recently published a warning about the dangers of investing in contracts for difference (CFDs), where losses can exceed an investor’s initial investment. The warning highlights the benefits of leveraged long and short exchange-traded products (ETPs), which provide an attractive, risk-controlled alternative to CFDs and spread betting.
While the US dollar is still the primary global currency, its long-term dominance is less certain, according to a report by the World Gold Council. With the dollar in apparent secular decline, central banks are reducing allocations to the currency while increasing purchases of traditional assets, such as gold. Investors looking to follow suit can access gold via physical ETPs, which combine the advantages of physical ownership with the liquidity, transparency and ease of execution typical of an ETF.