ETF Securities rolls out short and leveraged China ETFs

Nov 3rd, 2015 | By | Category: Alternatives / Multi-Asset

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ETF Securities, a London-headquartered exchange-traded fund provider, has listed two short and leveraged (S&L) exchange-traded products based on the FTSE China 50 Index.

ETF Securities rolls-out short and leveraged China ETFs

The new ETFs offer short and leveraged China exposure through Chinese stocks listed in Hong Kong.

The ETFS 3x Daily Long FTSE China 50 and the ETFS 3x Daily Short FTSE China 50 have been listed on Italy’s Borsa Italiana and are designed to provide three times the daily return and three times the inverse of the daily return of the underlying index, respectively.

The rise in uncertainty witnessed in Chinese equity markets since the start of the year has provided a supportive backdrop for the launch of products such as these which allow investors to take advantage of increased market volatility through tactical positioning. According to ETF Securities, efforts by the Chinese authorities to support capital market reform while maintaining steady growth is likely to ensure that equity markets continue to provide ample investment opportunities.

Commenting on the launch, Massimo Siano, Head of Southern Europe, ETF Securities, said: “We are listing our 3x China Equity ETPs on Borsa Italiana in response to a strong demand from our Italian clients. Investors’ appetite for Chinese equity exposure continues to grow in reaction to heightened volatility and we believe these products provide opportunities to trade on a short-term basis with a competitive total cost of ownership.

“We have seen tremendous growth in our short and leveraged platform in Italy over the last few years and these launches will complement our existing leveraged range.”

The funds track indices developed by FTSE Russell, a leading global index provider, which are comprised of the 50 largest and most liquid Chinese stocks listed and trading in Hong Kong, and is used by investors around the world to gain exposure to the wider Chinese market. The indices are calculated assuming a defined leverage multiple, either long or short, which is then applied to the underlying reference index. The leverage is reset daily.

Sudir Raju, Managing Director ETP Relationships, EMEA, FTSE Russell, commented: “FTSE Russell has a strong track record of constructing China focused indices, and we are pleased that ETF Securities has chosen to license the newly developed FTSE China 50 Short and Leveraged for its Italian listed products. Market participants around the world continue to select FTSE Russell benchmarks for ETFs due to their innovative design, transparent methodology and strong governance.”

The ETFS 3x Daily Long FTSE China 50 (CH3L) and the ETFS 3x Daily Short FTSE China 50 (CH3S) each carry a 0.98% expense ratio.

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