Leverage Shares exchange traded products (ETPs) seek to deliver two times (2x) the daily performance of individual household name stocks.
Leverage Shares ETPs:
Our Exchange Traded Products (ETPs) aim to help a variety of market participants express a targeted opinion on individual stocks with transparent and efficient leveraged investment solutions.
See our ‘About’ page for additional information about Leverage Shares and our partners.
The term “Exchange Traded Product” (ETP) is a broad term that encompasses Exchange Traded Funds (ETFs), Exchange Traded Commodities (ETCs), and Exchange Traded Notes (ETNs). ETPs seek to provide returns based on the price movements of an underlying asset or benchmark, such as an index, commodity, or individual stock. However, ETFs, ETCs, and ETNs represent different structures for achieving this exposure and can pose different risks.
ETPs, such as ETCs and ETNs, are structured as debt securities, but unlike conventional bonds, these instruments pay no interest and are not rated. ETPs can give investors a means of diversifying investment portfolios without the need to:
Importantly, ETPs are different than ETFs in a number of ways. ETPs (including ETCs and ETNs) are not funds, and therefore lie outside the remit of UCITs — the Undertakings for Collective Investments in Transferable Securities.
However, while ETPs are not UCITS compliant, they may be UCITS eligible. This means that they are investments which — while again not themselves compliant with UCITS — are capable of being an eligible investment for another UCITS fund.
Leverage Shares Exchange Traded Products (ETPs) are debt instruments issued by a special purpose vehicle (SPV). Each ETP is a separate Series of the SPV, and is a debt security that delivers the returns of the assets held by the Series. Each Series invests its own assets and the assets borrowed on margin in a single stock, such as the common stock of Apple Inc. (AAPL), to achieve leveraged exposure to that equity as per its investment objective.
Experienced investors and market participants may use Leverage Shares Exchange Traded Products (ETPs) for a variety of strategies, including but not limited to:
Leverage Shares Exchange Traded Products (ETPs) can be traded through brokerage accounts that have the ability to trade products listed on the London Stock Exchange. Investors do not typically need a margin account in order to trade Leverage Shares ETPs
Leveraged Exchange Traded Products (ETPs) that use margin borrowing to achieve leveraged exposures invest their own assets plus assets borrowed through a margin account directly in the shares of the underlying companies.
This method incurs borrowing costs related to margin borrowing, but avoids credit risks since it physically owns the underlying shares.
Swap-based leveraged ETPs do not invest directly in the underlying stocks and instead enter into over-the-counter (OTC) swap agreements with a counterparty. These swaps can have associated costs as well as be susceptible to credit risk.
Leverage Shares Exchange Traded Products (ETPs) do not invest in over-the counter (OTC) derivatives like swaps or forwards and therefore do not have credit risk.
No. The most an investor can lose in a Leverage Shares ETP is the entire value of their initial investment plus any reinvested dividends.
Leverage Shares Exchange Traded Products (ETPs) provide exposure to stocks that are listed in the US, UK or Italy. However, because the Leverage Shares ETPs are listed in London and may trade in currencies (e.g., GBP, USD, EUR) that are different from the currency of the underlying security, certain Leverage Shares ETPs will expose investors to foreign currency movements. For example, the Leverage Shares ETPs that are listed in GBP but which invest in US companies will reflect the currency movements between the British Pound (GBP) and the USD (US dollar). In this example, if the USD appreciates versus the GBP, this can positively impact the fund’s returns, while a depreciation of the USD versus the GBP is expected to negatively impact the returns.
The margin provider for Leverage Shares Exchange Traded Products (ETPs) is Interactive Brokers. For more information on our partners, please see the ‘About’ page.
The Margin Rate for each Leverage Shares ETP is the respective Benchmark Rate plus one percent (1%). Leverage Shares uses internationally recognized benchmarks on overnight deposits as a basis for determining the Benchmark Rates. For each ETP, the Benchmark Rate is determined by the base currency of the underlying equity security for the respective ETP, according to the following schedule:
|Base Currency of Underlying Equity Security||Benchmark Rate|
|GBP||GBP LIBOR (Overnight Rate)|
|USD||Fed Funds Effective (Overnight Rate)|
|EUR||EONIA (Euro Overnight Index Average)|
The index provider is the New York Stock Exchange. More information about the index provider can be found at nyse.com
No, Leverage Shares Exchange Traded Products (ETPs) only provide long exposure to the underlying security.
No, dividends from investments in the underlying security are reinvested.
Leverage Shares ETPs are in fact eligible* as Undertakings for Collective Investment in Transferable Securities (UCITS), meaning they can be invested in by other UCITS-compliant funds. However, Leverage Shares ETPs themselves are not UCITS-compliant.
*Disclaimer: UCITS eligibility subject to the specific UCIT schemes’ investment and borrowing powers as outlined in its Prospectus and legal instruments constituting the UCITS scheme.