Global AUM in Short & Leveraged ETPs at record $63bn as investors reposition bullishly in equities and bearishly in bonds

The AUM of Short & Leveraged (S&L) ETPs reached a record $63 billion at the end of June 2015, a 2% rise YTD. The growth was driven by S&L investors globally repositioning themselves bullishly in equities and bearishly in debt…. 

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Viktor Nossek, Director of Research at WisdomTree Europe



   S&L Equity ETPs saw $0.8 billion of net inflows as investors increased long positions in European and Japanese equities, while positions (long and short) in US equities were cut

   A widely anticipated interest rate hike by the Fed coupled with heightened uncertainty surrounding Greece triggered the build-up of short positions in US Treasuries and Bunds. Cumulative inflows into short ETPs tracking debt globally rose to $980 million this year

   S&L Investor sentiment in commodities lacked conviction following volatile and sideways moving oil prices since February 2015. ETPs tracking crude oil saw outflows in both long and short positions

   Boost ETPs also continue to grow in popularity as AUM reached US$ 383 million and a new record in monthly turnover of $ 1.1 billion was achieved in.

WisdomTree, an Exchange Traded Fund and exchange traded product sponsor, and specialist in short & leverage ETPs through the Boost ETP product range, is proud to announce the release of the Boost, A WisdomTree Company, Short & Leveraged ETFs/ETPs Global Flows Report for June 2015.

The report highlights a record AUM figure of $63 billion for S&L ETPs at the end of June, which is up 2% YTD. The report demonstrates that globally investors continue to increase their usage of S&L ETPs.

Investors in S&L ETPs can express bullish as well as bearish sentiment by investing in either a Short or Leveraged ETP. Since S&L ETPs tend to be held for shorter periods and used more for tactical positioning, AUM and flows data for S&L ETPs can provide valuable insight into the market sentiment of a relatively sophisticated set of investors. The Boost Short & Leveraged ETFs/ETPs Global Flows Report highlights the key flows and trends in S&L ETPs across all asset classes and geographies.

Viktor Nossek, Director of Research at WisdomTree Europe commented:

“June saw investors in Short & Leveraged ETPs reposition bullishly in equities and bearishly in bonds. A strong bullish conviction towards Japanese and European equity markets was evident in the building up of long positions and unwinding of short positions in ETPs tracking them. At the same time, S&L investors cut their US equity exposure by unwinding some of their long and short positions.

The bullish repositioning in equity markets outside the US resulted in inflows of $0.8 billion in S&L equity ETPs globally. By contrast, sentiment in fixed income soured, helped not least by the uncertainty of Greece’s membership in the EMU and rising rates expectations in the US as the Fed signalled its readiness to raise the policy rate before the end of this year. S&L Investors increased their short positions in US and German government bonds as a result, helping this year’s cumulative inflows into short ETPs tracking debt globally to peak to $980 million. Where investors lacked conviction was crude oil, underpinned by a directionless but volatile moving oil price that compelled investors to cut back on both their bullish and bearish positions in June.

The introduction of Boosts range of 3x short and 3x leverage ETPs was a first in the UK in December 2012,in Italy in October 2013 and within Germany at the end of 2014, and are proving to be a useful tool for investors to hedge risk or express a view with less capital.”

The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Please see the disclaimer for a full description of the risk involved with ETP’s.

Today, S&L ETPs cover all major assets classes and geographies. In terms of asset allocation at the end of June, equity ETPs are the most popular with 6% of total AUM ($43.2 billion), followed by debt (15%, $9.6 billion) and commodities (9%, $5.8 billion). In equities, most of the AUM is focused on US large cap and US small cap equities ($16 billion), US sector ETPs ($6.9 billion) and European equities ($6.7 billion). In Europe, broad European indices are the most popular ($2.8 billion in AUM), followed by Germany ($1.5 billion), Italy ($571 million) and France ($515 million). In debt, most of the AUM is in US government debt ($6.1 billion), German government debt ($1.4 billion), Italian ($308 million) and European-region focused ($300 million) government debt. In commodities, oil is the most popular ($3 billion in AUM), followed by natural gas ($1.1 billion), gold ($693 million) and silver ($683 million).

Investors are increasing their use of S&L ETPs for a variety of reasons. There is wider product availability, greater product knowledge from improved educational resources, and increased availability of hedging tools and leveraged instruments. There is also a move towards independent, transparent and exchange traded instruments such as ETFs and ETPs.


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