WisdomTree has cross-listed a wide range of inverse and leveraged ETPs covering a broad mix of equity, fixed income and commodity benchmarks on LSE. The new listings, all denominated in British pounds, expands the toolkit of tactical solutions available to sterling-based investors. Morgan Lee, Head of European Distribution at WisdomTree, commented: “These products have had proven traction with our European clients and we believe that they can be complimentary portfolio solutions for managing risk in an increasingly volatile macro environment.”

Investors in currency ETFs with sterling exposure may need to brace themselves for increased volatility following confirmation that UK Prime Minister Theresa May will trigger Article 50 (the official process whereby Britain begins to leave the EU) this month and Scotland’s First Minister Nicola Sturgeon is preparing for a second referendum on Scottish independence.

By Nick Leung, Research Analyst at WisdomTree.

In Part 1 of “Don’t let roll yield erode your commodity returns”, we explored how an optimised rolling commodity strategy can respond to changing market conditions arising from policy pressures; better managing the roll return component and lowering volatility at the same time. Part 2 explores another key driver for curve-optimised strategies, which is seasonality.

US equity volatility, both realized and implied, are at significantly depressed levels, according to latest research from S&P Dow Jones Indices. Tim Edwards, Senior Director at S&P Dow Jones Indices, commented: “Following a week in which both US and global equity indices breached all-time highs, the economic measurements of volatility show very few visible signs of distress in the market.” Despite low volatility indicators, investors are warned not to be complacent in an environment that appears to harbor significant political risks, and may wish to hedge with an ETF tracking the VIX Index.

By Nizam Hamid, Head of Strategy at WisdomTree in Europe.

Leverage has been around for hundreds of years and, today, there are many different types of short and leveraged instruments – from notes, to funds, to certificates – listed on exchanges globally. Because of the combined features of leverage and daily compounded returns, these types of trading instruments can enhance returns and be a robust, transparent, secure and cost-effective trading tool. As a provider of short and leverage ETPs through our Boost product range, we want investors to clearly understand how these products work before trading them.

By Jesper Koll, Head of Japan at WisdomTree.

Japanese Prime Minister Shinzo Abe is poised to be the first global leader to present President Trump with a concrete policy proposal that is designed to shape and promote Trump’s “America First” agenda and, at the same time, to advance the US-Japan alliance. Abe will meet Trump for the second time on 10-11 February and PM Abe appears very determined to impress the President by offering a concrete “deal” so that both countries can move from talk to action. If, as we suspect, the meeting goes well, the implications are poised to be positive for US-Japan economic and financial relations.

By Nizam Hamid, ETF Strategist, WisdomTree.

The Supreme Court this week ruled that the UK government must hold a parliamentary vote before triggering Article 50 to begin the process of leaving the EU. We expect sterling volatility to continue over the coming quarter with Brexit and the economy remaining key influences. Other events that are likely to impact sterling in the coming months, include: Bank of England interest rates announcement (2 February 2017), UK Inflation (14 February 2017), UK Budget (8 March 2017) and Article 50 (end March 2017).

By Nick Leung, Research Analyst at WisdomTree.
Turnover in WisdomTree’s range of leveraged oil exchange-traded funds hit a record high of $10bn in 2016 as investors moved to exploit the dramatic recovery in the energy price. As with oil, the majority of trades in gold were focused on the leveraged long side, with $474m invested in leveraged longs versus $187m in short positions. The assets may see further interest on the leveraged long side in 2017 if recent price momentum is maintained.

By Viktor Nossek, Director of Research for WisdomTree in Europe.

The bullish conviction in European bonds is dissipating, while bank stocks are rallying. Blame Brexit, Trump’s US presidential win, Italy’s “no” referendum on constitutional reform and now the ECB’s QE “taper.” These macro events have inflicted violent price corrections in government bonds but the longer term ramifications to specific risk assets – most notably bank stocks – may be bullish. The Eurozone’s deeply discounted banking sector – particularly Italy’s – offers investors potential entry points as the premium prices of safe havens are under pressure.

By Nick Leung, Research Analyst at WisdomTree.

Investors have jettisoned long oil ETFs following the Organization of Petroleum Exporting Countries’ (OPEC) recent decision to curb production, with $43m in redemptions from leveraged long positions and an 80% year on year jump in trading volumes.