Boost, an independent provider of short and leveraged exchange-traded products (ETPs), has launched an ‘advisor toolkit’ deigned to provide easy-to-understand educational materials for anyone considering an investment in a short or leveraged ETP.
Screenshot of Boost’s short and leveraged ETP return simulator.
The toolkit comes in response to a number of concerns by global regulators regarding the use of leverage by investors, and follows the introduction of more mainstream educational resources by iShares and Vanguard.
In Europe, ESMA and the EBA, key cornerstones of the region’s system of financial supervision, have raised concerns that during the current period of low investment returns, inexperienced retail investors across the EU are being tempted to invest in complex financial products (such as CFDs and spread bets), which they may not fully understand and which can end up costing them money they cannot afford to lose.
Short and leveraged ETPs, which provide inverse and geared investment results, fit into this ‘complex’ category. And while short and leveraged ETPs offer a number of distinct advantages and safeguards when compared to CFDs and spread bets, London-based Boost believes that further education is required to help advisors assess product suitability.
Nik Bienkowski, Co-CEO of Boost, said: “Boost ETP has been surprised by the response from Europe’s financial advisors interested in using short & leveraged ETPs but have not had the tools to enable them to understand the products fully. As a new independent provider, Boost ETP is committed to providing professional investors with the tools they need, regardless of whether the end investor is planning to purchase a Boost ETP, or other product.”
The new toolkit includes a range of fact sheets explaining short and leveraged returns, compounding, liquidity and counterparty risk; a return simulator; access to presentations, conference calls and seminars; a series of frequently asked questions; and trade ideas on how to use short and leveraged ETPs in the current market environment.
Bienkowski added: “It’s clear that there is demand for short and leveraged products given the growth in these types of ETPs, and the wide use of other types of short and leveraged products. Used in the right way, they can benefit an investor’s portfolio. Global short and leveraged ETP assets have risen to $48.5 billion as many financial markets have trended sideways, resulting in volatile but poor long-term returns. Short and leveraged ETPs make it possible to take advantage of this short term volatility in world financial markets.”
The toolkit is available here: http://www.boostetp.com/Content/Advisor-Tool-Kit