ETF Securities Launches "Ultra" Series for Customised Nasdaq-100 Exposure
The growing appetite for investors to trade their conviction has led to the launch of ETF Securities ‘Ultra’ trading products - ETFS Ultra Short Nasdaq 100 Hedge Fund (ASX code: SNAS) and ETFS Ultra Long Nasdaq 100 Hedge Fund (ASX code: LNAS).
Both allow investors to trade leveraged exposure to the Nasdaq-100 index, one of the world’s most prominent large-cap growth indices, featuring iconic companies like Apple, Google, Intel and Tesla.
LNAS aims to provide investors with geared returns that are positively related to the returns of the Nasdaq-100 index between 200% and 275% of its net asset value.
SNAS aims to provide investors with geared returns that are negatively related to the returns of the Nasdaq-100 Index. The fund provides exposure to the Nasdaq-100 Index of between -200% and -275% of its net asset value.
Both these ETFs are currency hedged. Each achieves exposure to the Nasdaq-100 Index using derivatives. They invest primarily in a portfolio of short E-mini Nasdaq 100 Futures contracts listed on the Chicago Mercantile Exchange.
Kris Walesby, CEO ETF Securities, said: “We are very excited to launch these two trading products. These products show the growing innovation in the ETF space. The leveraged/short ETFs has witnessed a continuous rise in popularity as investors cannot lose more than the value of their initial investment, compared to using other leveraged instruments.
“These products are positioned as short-term investments - investors might trade these for a day, specifically as a temporary conviction play. These trading products give power to investors to trade based on their expectations of whether the Nasdaq-100 will gain or fall in the short-term, as well as offer the ability to create a temporary hedge for existing positions and avoid the need to sell, either crystallising losses or creating a capital gain.”
Evan Metcalf, Co-Head of Portfolio Management for ETF Securities added: “Geared or leveraged trading products such as LNAS and SNAS are likely to be used by highly experienced investors and traders to gain short-term market exposure. Because of their ability to amplify returns, they require less capital to be committed upfront than traditional investments, which makes them attractive to different types of users.
“There are two primary users of geared ETFs: traders who look to take speculative stand-alone positions and investors looking to implement temporary shifts in asset allocation as part of a considered portfolio repositioning. In both cases, their investment horizon is short-dated - often less than a day. In many cases, the investment horizon is driven by an upcoming event that the trader or investor has a high conviction view on; examples might include economic data releases, earning announcements of key companies or technical model signals.
“A key advantage of leveraged ETFs is their simplicity of use compared with alternative sources of leverage, which include borrowing (via a margin facility, for example) and direct use of derivatives, both of which may be costly, complex or inaccessible to certain investors,” added Mr Metcalf.
Mr Metcalf noted: “A word of caution. Leveraged ETFs are high risk investments. As with any geared investment, leveraged ETFs not only magnify gains, they also magnify losses and investors need to be aware of their risk tolerance and continually monitor their investment when using these products. These are not your traditional long-term buy-and-hold investments.”
LNAS and SNAS both charge management costs of 1.00% per annum.
Rob Hughes, Head of Index and Advisor Solutions, Nasdaq Global Indexes, said: “The Nasdaq-100 Index is the benchmark for tracking the global companies changing the way we work, socialise, transact, and move every single day. From technology to medicine to industrials, there is almost no corner of innovation that Nasdaq-100 Index does not track. With ETF Securities’ launch of LNAS and SNAS, investors in Australia will also now have new access to the first leveraged and inverse Nasdaq-100 ETFs launched on ASX. We look forward to expanding our collaboration with ETF Securities and enabling investors to capture market potential in a more efficient, easy and cost-effective way. Congratulations to the ETF Securities team.”
About ETF Securities
ETF Securities Australia is the independent champion of specialist ETF solutions. Our growing range of cost effective
and innovation-led ETFs are built to help investors and their advisers achieve better investment outcomes by providing access to yield, thematic equity themes and commodities.
Our specialist multi-asset range goes beyond traditional ‘core’ to help optimise opportunities around enhanced core and satellite exposures. From offering the potential to boost growth, to improving income or aiding greater portfolio diversification, our versatile solutions help make a difference.
Beyond our range of specialist ETFs, we remain committed to acting as an ETF consultant to Australian advisers and investors by providing actionable investor knowledge to help them use ETF solutions more effectively.
For all media queries please contact:
Kris Walesby – CEO, ETF Securities
Evan Metcalf – Co-Head of Portfolio Management, ETF Securities
Simrita Virk at Shed Connect
M: 0434 531 172
E: simrita.virk@shedconnect.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.