WisdomTree launches three inverse government bond ETPs

Dec 12th, 2017 | By | Category: Fixed Income

WisdomTree has launched three new Boost-branded ETPs offering investors inverse exposure to UK Gilts, and triple inverse exposure to German Bunds and US Treasuries: the Boost Gilts 10Y 1x Short Daily ETP (1GIS LN)Boost Bund 30Y 3x Short Daily ETP (XMWH GY), and Boost US Treasuries 30Y 3x Short Daily ETP (UL3S LN).

WisdomTree launches three inverse government bond ETPs

Jose Poncela, head of ETNs at WisdomTree in Europe

Jose Poncela, head of ETNs at WisdomTree in Europe, commented: “We’re excited to be launching three inverse fixed income ETPs at a time when such products are attracting the majority of flows year-to-date in the European short-and-leveraged market. The Boost Bund 30Y 3x Short Daily ETP, in particular, is the first fixed income ETP in Europe that offers inverse exposure to German Bunds with a maturity of over 25 years. It’s yet another example of our commitment to innovation in the European short-and-leveraged space.”

1GIS offers investors the inverse daily performance of the Long Gilt Rolling Future Index, which tracks front-month Long Gilt futures. The fund has an annual management charge of 0.25% and is listed on London Stock Exchange (LSE).

XMWH provides investors with the triple inverse daily performance of the BNP Paribas Long Bund 30Y Rolling Future Index, which tracks front-month Euro-Buxl futures. The fund is listed on Borsa Italiana and Deutsche Börse and has an annual management charge of 0.30%.

UL3S offers triple inverse exposure to the daily performance of the BNP Paribas US Treasury Ultra-Bond 30Y Rolling Futures Index, which tracks front-month Ultra US Treasury Bond futures. The fund is listed on LSE and Borsa Italiana and has an annual management fee of 0.30%.

“Investors mandated with finding yield in Europe’s high-grade bond market have had to take significant duration risk to do so,” said Viktor Nossek, director of research at WisdomTree in Europe. “These investors now look particularly vulnerable against a backdrop of inflationary pressures emanating from domestic demand-led growth as the eurozone economy accelerates. Most at risk are Bunds, as-aside from having benefited disproportionately from the vast quantities purchased by the ECB – their yields remain well below inflation.”

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