Investor Trends in ETFs & Leverage Products – "Sane or Insane?"
As classic year-end event, the Lugano Fund Forum attracted this time more than 1,500 financial professionals from all over Europe: Switzerland, Germany, Austria and (naturalmente) Italy. The Exchange Traded Products Day – Lugano Stream, organized by SIX Swiss Exchange, this year was devoted to Leverage Products. Here are a comprehensive overview incl. some thoughts gathered through the walk-around and talks.
KEY TAKE AWAYS
? The president elect Trump and its announced 100-days-programme has a big influence towards the asset allocation among European asset managers and investors: Sector-rotation towards finanical, health care and materials is fully underway! (By the way, does "infrastructre projects" in the "Trumpire" mean, its a hidden privatization of U.S. highways and bridges? A topic we should cover separately...)
However, an even bigger impact has the referendum in Italy (referendum costituzionale 2016; Dec. 4th). 41% of the audience voted not to do any investment decision before the referendum's outcome.
? 67% of the investors answered the question "For what reason do you use leverage products" with "to speculate". Only 10% (!) use leveraged products like Short ETFs for hedging. In, 23% said their ambition is to generate systematically alpha with leverage products.
? According to the Leveraged Products Panel, most tactical investors closed already its positions they initally opened in the "Trump Night". With other words, the bunch of heavy traders are luring for a new volatility spike.
? No interest rate hikes in Europe (ECB) and Switzerland (Swiss National Bank) anticipated, but already priced in that the FED do two rate hikes (Dec, somewhere in mid-2017). They have to, in order to be prepared for the temporary recession in 2018.
? Without propper risk management and alerting, you get faster burned that you think.
CURRENT TRADE IDEAS
? Tactical Investment Strategies (for experienced investors): --- Renzi Trades --- LONG Bund-Future Leveraged ETF/ SHORT Italian Goverment Bonds ETF. (pick what issuer you're comfortable with) --- Sector Bulls ---- LONG Direxion Daily Financial Bull 3X ETF (Ticker: FAS). LONG MACLJB, 26% p.a. in EUR Multi Barrier Reverse Convertible auf Banco Santander Central Hispano S.A. / Société Générale S.A. / UniCredit S.p.A. --- Gold Belivers --- LONG KAATZU, 25% p.a. in US$ Multi Barrier Reverse Convertible linked to Barrick Gold / Goldcorp / Newmont Mining.
THE LATEST ETF FLOWS AT A GLANCE
MORE INFORMATION
Leveraged ETFs (listed on U.S. Exchanges, European and Asian Exchanges) you will find on our flagship portal www.payoff.ch, incl. more than 114'000 listed Leverage Products like Warrants, Mini-Futures and Knock-Out Warrants. @payoff_ch
The U.S. centric dashboard about the ETF industry is etf-radar.com, and for all other market and investment strategies, please contact me directly. @etphq
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This post is for information only. It is not meant to be a recommendation to buy or to sell securities nor an offer to buy or sell securities.