Short And Leverage ETP Assets Hit $51bn

Assets under management in global short and leveraged exchange-traded products hit $51 billion (€38.5 billion) as the first six months of the year saw monthly trading volumes rise 70 percent, and equity investors turn bullish, according to Boost ETP.The global short and long inflows were over $2 billion in June alone pushing the first half inflows up 15 percent, or $7 billion, compared to the last six months of 2012.

The boost in inflows comes as investors increase their risk-on sentiment, using the products to hedge portfolios or take a negative view.

Data from the ETP provider shows that $35.4 billion is in short and long equity ETPs. There is $4.1 billion held in short and long equity ETPs tracking Europe or European countries of which 54 percent is held in short equity ETPs. About $9.2 billion is held in short and long fixed income ETPs and $3.9 billion is held in short and long commodity ETPs

Trading volumes on exchange also rose throughout the year rising 70 percent from $114 billion at the start of 2013 to $195 billion each month.

According to the note from Boost ETP, Japanese equities remain popular, increasing their net notional long positions by $934 million as Boost launched Europe’s first short and leverage tracking the TOPIX index.

Investors have also been using short positions to navigate the fall in the price of gold.

Nik Bienkowski, co-CEO of Boost ETP, said in a statement: “During June, short and leverage equity ETP investors became bullish on equities, reversing the trend of increasing short  positions for the first five months of 2013.  Fixed income investors increased net short positions, consistent with an expected rise in interest rates.

“Demand for S&L ETPs is continuing at a rapid pace in 2013….57 percent of global short and leverage ETPs assets are currently short, indicating that investors are commonly using short ETPs to hedge portfolios or take a view on a negative conviction,” he said.

The increased interest in short and leveraged ETPs saw Boost ETP launch 16 new short and long equity ETPs, bringing its total fund offering to 36.  This year Boost launched Europe’s first short and leveraged palladium ETP and Japanese equity ETPs trading the TOPIX index.