A short note today on the launch of a batch of short and leveraged exchange traded products from the team behind the successful Global X ETF platform.

Leverage Shares (leverageshares.com) have been building a specialism in what’s generically called short and leveraged products or S&L trackers. I’m quite a fan of these as an alternative to spread betting where, on paper, your downside risk are potentially unlimited unless you have in place a stop loss. So, for a certain type of very active investor who has a strong trading position, these S&L products can absolutely make sense – as long as you realise that daily volatility compounds over time. Thus, these are absolutely Not buy and hold products.

Any way Leveraged Shares key selling point is that they say they are “ the only provider of physically backed ETPs and does away with the credit risk found in competing products”. In truth I’m not sure that counter party risk is in truth that great as most investors would only hold these products for a short period and thus they’d be unlucky to be hit by a counter party failure but I suppose in a synchronised credit event there is some risk.

Anyway, the key for me is that these leveraged shares offer an ability to target certain individual stocks and track key market turning points. The new batch of products – 28 ETps in all – are based on heavily traded US stocks and expands their product range to 40. Other selling points for the products include no need for margin calls, no stamp duty, and a competitive TER of 75 bps plus market standard margin rates and returns on the cash collateral. This big bunch of products seems focused on US tech stocks and allows investors to make high conviction trades or hedge positions. All 40 of the ETPs are available on London Stock Exchange in USD, GBx and EUR.

Additional information is available at leverageshares.com and investors can explore how Leverage Shares ETPs work on our YouTube channel.

The big table below lists the products.

Personally, my hunch is that mega cap tech stocks are due a correction soon, so this launch is probably well timed.

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