WisdomTree Europe has cross-listed ten Boost-branded exchange-traded products on the London Stock Exchange, offering investors up to 3x short and leveraged exposure to the price of oil. The ETPs, which are offered in US dollar and British pound share classes, have their primary listings on the Borsa Italiana.
WisdomTree Europe reports over $4.1bn in turnover and an increase of 43% in the AUM of their oil ETPs thus far this year.
WisdomTree Europe recently saw its assets under management (AUM) hit $1bn. It notes that the Boost Oil ETPs have proved particularly popular with investors, recording over $4.1bn of turnover between January and June.
Viktor Nossek, Director of Research at WisdomTree Europe, said in a statement: “Oil remains an important area of investor interest due to its macro-economic and geopolitical characteristics. The record traded turnover this year of close to $2.4bn in the Boost WTI 3x Oil S&L ETPs, on Borsa Italiana, is a testament to the efficiency and attractiveness of these products for investors looking to take short term tactical views on the price of oil. We expect the oil price to continue to primarily reflect the recovery in economic activity in emerging markets.”
Nizam Hamid, ETF Strategist at WisdomTree Europe, added: “Since the beginning of the year, in addition to record turnover, we have seen a 43% increase in AUM in our Oil ETPs to $223m, equivalent to an underlying notional of $664m. By offering unleveraged [inverse], short and leveraged exposures on WTI and Brent, investors can efficiently manage their portfolio allocation and positioning to oil.”
The newly cross-listed ETPs include the:
Boost WTI Oil 1x Short Daily ETP – USD (OILZ) Total expense ratio (TER) – 0.49%
Boost WTI Oil 1x Short Daily ETP – GBP (OIZL) TER – 0.49%
Boost WTI Oil 2x Short Daily ETP – USD (2OIS) TER – 0.65%
Boost WTI Oil 2x Short Daily ETP – GBP (2OSI) TER – 0.65%
Boost Brent Oil 3x Short Daily ETP – USD (3BRS) TER – 0.99%
Boost Brent Oil 3x Short Daily ETP – GBP (3BSR) TER – 0.99%
Boost WTI Oil 2x Leverage Daily ETP – USD (2OIL) TER – 0.65%
Boost WTI Oil 2x Leverage Daily ETP – GBP (2OLI) TER – 0.65%
Boost Brent Oil 3x Leverage Daily ETP – USD (3BRL) TER – 0.99%
Boost Brent Oil 3x Leverage Daily ETP – GBP (3BLR) TER – 0.99%
The indices underlying the Brent Oil ETPs and the WTI Oil ETPs are the NASDAQ Commodity Brent Crude Oil Index and the NASDAQ Commodity Crude Oil ER Index, which track the performance of front-month Brent and WTI oil futures contracts respectively.
ETFs investing in commodity futures enter into standardised contracts which specify the price the commodity must be bought at on a specific date in the future. The investor is thereby exposed to the difference in the spot price of the commodity and the predetermined contract price. Contracts are traded and settled through a clearinghouse which requires participants to post margin as guarantee of fulfilling their obligation. As such, investors are able to earn interest on the collateral (usually money market instruments) held by the clearinghouse during the term of the futures contract. Futures investors do not take delivery of the underlying commodity but rather roll their position into further dated contracts as the current contract nears expiry.