BOOST ETP, a specialist provider of Short and Leverage (S&L) ETP, has released the BOOST Short & Leveraged ETFs/ETPs Global Flows Report for April 2014. The report reveals the AUM of S&L ETPs at the end of April is at $61.5 billion, down 1% from the end of March and up 6% from the end of December 2013.
Investors in S&L ETPs can express bullish as well as bearish sentiment by investing in either a leveraged or a short ETP. Thus the AUM of S&L ETPs can reveal a broader range of investor sentiment than flows or AUM data for mutual funds and other ETPs.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Since S&L ETPs tend to be held for shorter periods and used more for tactical positioning, AUM and flows data for S&L ETPs can provide valuable insight into the market sentiment of a relatively sophisticated set of investors. The BOOST Short & Leveraged ETFs/ETPs Global Flows Report highlights the key flows and trends in S&L ETPs across asset classes and geographies.
S&L investors repositioned bearishly across major asset classes in April. Lacking momentum, the directionless equity markets have led S&L investors to reduce their bullish stance in equities, as the $636 million redemptions in long positions contrasted the $487 million creations in short positions.
Coinciding with bearish net outflows from equities were net inflows into commodity ETPs, where S&L investors repositioned bearishly in energy and bullishly in precious metals. S&L investors’ bearish conviction in oil and natural gas was marked by the inflows into short products of respectively $116 million and $129 million, and by outflows from long products of respectively $34 million and $57 million.
The $39 million inflows into and $15 million outflows from silver ETPs underscores S&L investors’ bullish conviction in silver. Albeit on a much smaller scale, flows in gold ETP were equally bullish.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataAmidst a correction in technology stocks and sideways trading broader equity markets, S&L investors positioned in equities lacking conviction. As a result, the inflows into long and short US equity ETPs were balanced.
Within European equity ETPs, S&L investors repositioned bullishly in Italy and Russia and bearishly in Germany, France and Sweden. European region focused equity ETPs saw flows as overall bullish.
The spectre of when, not if the Fed is going to raise interest rates after a complete wind down of QE sustains the overwhelmingly bearish of S&L investors in US debt. Following the $2.8 billion of outflows in March, inflows of $22 million were modest, most of which were creations of short ETPs.
Within European fixed income, the major flows were confined to German and UK debt, where most of the redemptions seen were in short ETPs. The decelerating inflation rates in Europe’s best performing economies underscore bullish positioning by S&L investors.
S&L investors remained overly bullish on silver. Following the bullish flows seen in March, April saw a continuation of creations of long positions and redemptions of short positions in silver ETPs. Silver’s disproportionate fall last year relative to gold may have compelled S&L investors to increase their bullish bets on the metal since February.
Today S&L ETPs cover all major assets classes and geographies. In terms of asset allocation at the end of January, equity ETPs are the most popular with 71% of total AUM ($43.4 billion), followed by debt (17%, $10.3 billion) and commodities (7%, $4.1 billion).
In equities, most of the AUM is focused on the US (US large cap, US small cap and US sector equities of $18.6 billion) and European equities ($6.1 billion). In Europe, broad European indices are the most popular ($2.3 billion in AUM), followed by Germany ($1.4 billion), Italy ($689 million) and France ($540 million).
In debt, most of the AUM is in US government debt ($7.1 billion), German government debt ($1 billion) and European government debt ($193 million). In commodities, natural gas ($990 million of AUM), silver ($914 million of AUM) and oil ($966 million of AUM) are the most popular, followed by gold ($827 million of AUM).
