Short and leveraged exchange-traded product specialist Boost has revealed that its triple leveraged oil product has enjoyed a surge of interest in recent weeks, with assets under management in the product just a rally away from reaching the milestone mark of $100m in assets.
The Boost ETP provides triple leveraged exposure to the price of front-month NYMEX Crude Oil commodity futures contracts.
As at the time of writing, the Boost WTI Oil 3x Leverage Daily ETP (3OIL) had $87.8m in assets, meaning a relatively small amount of inflows or market gains could lift the product above the psychologically important $100m threshold.
The ETP, which traded $273m in February, is listed on the London Stock Exchange, Borsa Italiana and Deutsche Börse’s Xetra platform. It is linked to the Nasdaq Commodity Crude Oil ER Index.
Across the Boost platform, which includes a range of short and leveraged equity, fixed income, currency and commodity exposures, trading volumes hit a new record of $655m in February, adding up to a notional volume close to $1.95bn.
The firm also reached a record of $251m in AUM, or $730m in notional terms. Trading volumes in Boost’s platform have been on a clear growth trend, with monthly turnover quadrupling over the past 6 months.
Hector McNeil, Co-CEO of WisdomTree Europe, parent of Boost, had this to say: “3OIL has been a spectacular success. Feedback from clients has been very complementary and they clearly see 3OIL and 3OIS [its short equivalent] as the product of choice for trading the volatility in the oil markets. 3OIL’s traction with investors is particularly impressive as it has usurped well established and existing products across Europe and multiple ETP providers to become the most liquid leveraged oil ETP.”
WisdomTree Europe’s Director of Research, Viktor Nossek, added: “As investors assess the discounted levels of energy prices against an uncertain global macro backdrop, oil prices are likely to be less directional and more volatile. The cold weather in the US and more upbeat assessments of future global demand conditions for energy have cut short the downtrend in crude oil. However, as oil futures zigzag amidst an uncertain outlook, investors looking to leverage their exposure to oil should consider switching between both bullish and bearish ETCs over short holding periods.”
The ETP has an annual management fee of 0.99%.