Frequently Asked Questions
What are Leverage Shares ETPs? What is an ETP and how is it different from an ETF?
About Us Trading ETPs Product Characteristics Costs and risks Legal Scenarios
About Us Trading ETPs Product Characteristics Costs and risks Legal Scenarios
About Us
Leverage Shares exchange traded products (ETPs) seek to deliver five times (5x) three times (3x), two times (2x), minus one time (-1x), minus two times (-2x), minus three times (-3x), minus five times (-5x) & delta one (1:1) the daily performance of individual household name stocks and ETFs.
Leverage Shares ETPs:
- Can be efficient tools for gaining magnified exposure to individual stocks
- Achieve leverage through margin borrowing
- Have physical ownership of the underlying stocks, and therefore do not use swaps or other derivatives to achieve their exposure
- Do not have credit risk, because each series of the special purpose vehicle (SPV) has physical ownership of the underlying stocks and does not use derivatives, like swaps, to achieve its leverage
- Trade in real time on the London Stock Exchange (LSE), Euronext Amsterdam (XAMS) and Borsa Italiana (XMIL)
- Prevent investors from losing more than their initial investment
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:
- Enter into swap agreements or forward contracts
- Take physical delivery of the underlying commodity
- Hold securities that constitute the underlying index
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.
- Exposure to the underlying stock is managed to deliver two times the return (gain or loss) of the underlying stock on a daily basis (net of fees and expenses)
- Leverage Shares do not have credit risk because each Series of the SPV has physical ownership of the underlying assets and does not use derivatives, like swaps, to achieve its leverage
- Each ETP is fully collateralized, as its subscription proceeds are invested directly in shares of the underlying equity security, effectively negating potential credit risk
- Leverage Shares ETPs have access to institutional pricing for margin borrowing, and therefore can be a cost-effective means for investors to gain leveraged exposure to individual stocks
Yes, several Leverage Shares Exchange Traded Products (ETPs) (e.g., TSLS, AMZS, APLS) provide short exposure to the underlying security.
Trading Leverage Shares ETPs
BNP Paribas has an agreement with Leverage Shares to provide continuous bid/ask spread on all of our products. Regardless of the trading volume, you will always be able to buy and sell Leverage Shares ETPs.
Experienced investors and market participants may use Leverage Shares Exchange Traded Products (ETPs) for a variety of strategies, including but not limited to:
Experienced investors and market participants may use Leverage Shares Exchange Traded Products (ETPs) for a variety of strategies, including but not limited to:
- Responding to technical indicators on particular individual stocks
- Trading the volatility and the directionality of individual stocks
- Positioning or responding to earnings and news announcements
- Reacting to overnight movements in foreign markets, which may carry momentum into the home market
- Hedging existing exposures in a portfolio
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, Euronext Amsterdam, Borsa Italiana and the Chicago Board of Options Exchange.
- EU trading hours
- Low price
- Multi-currency trading (GBx, USD, EUR)
- ISA/SIPP eligibility
- No W-8BEN forms
Please remember, however, that your capital is at risk if you invest. You may lose all of your investment. Tax treatment depends on your individual circ*mstances and may be subject to change in the future.
Product Characteristics
Leveraged ETPs (such as the Leverage Shares ETPs offering leveraged exposures where the underlying
asset is a stock or a bond) that use margin borrowing to achieve leveraged exposures invest their own
assets plus assets borrowed through a margin account directly in assets underlying the ETPs. This
method incurs borrowing costs related to margin borrowing, but avoids credit risks since it physically
owns the underlying shares or bonds. Swap-based leveraged ETPs do not invest directly in the underlying
stocks or bonds and instead enter into over-the-counter (OTC) swap agreements with a counterparty.
These swaps have associated costs (mainly in the form of fees charged by the swap counterparty) and
are susceptible to the credit risk of the swap counterparty.
Leverage Shares ETPs which invest in stocks and bonds do not invest in over-the counter (OTC)
derivatives like swaps or forwards. Since Leverage Shares plc physically own the underlying assets, the
credit risk associated with over the counter derivatives are not applicable to the Leverage Shares ETPs.
No. The most an investor can lose in a Leverage Shares ETP is the entire value of their initial investment plus any reinvested dividends.
Interactive Brokers is the clearing broker for Leverage Shares Exchange Traded Products (ETPs). For more information on our preferred providers, please see the ‘About’ page.
The index providers are the New York Stock Exchange and Stoxx Ltd., depending on the ETP. You can find out the index provider for each ETP on their respective product pages under “Our ETPs”. More information about the index providers and the indices can be found at https://www.nyse.com/index and https://www.stoxx.com/indices
No. Leverage Shares uniquely replicates the payout of its ETPs physically, so it holds the stocks underlying its leveraged ETPs and receives the dividends on such stocks. However, such dividends are reinvested in more shares of the underlying stock.
Costs and Risks
The Margin Rate for our Leveraged ETPs is the respective Benchmark Rate plus one and a half percent (1.5%) and is applied to cash borrowed to meet the specified leverage factor of each ETP. 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 | Sterling Overnight Index Average (SONIA) |
| USD | Fed Funds Effective (Overnight Rate) |
| EUR | Euro Short-Term Rate (€STR) |
- Experienced investors with knowledge of leveraged Exchange Traded Products (ETPs)
- Investors with high risk tolerance
- Investors who can afford to lose some or all of their investment
- Investors who understand the daily compounding of leveraged ETPs and its effects on long-term returns
- Investors who have the time and ability to monitor their investments on a daily or intra-day basis
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. For more information, click here.
All product costs are detailed in the relevant exchange-traded product (ETP) FactSheet and KIDs, which are available on each individual ETP page. Generally, for our Leveraged and Inverse ETPs, the following fees are applicable:
Leveraged Long Exposures
1. Arranger Fee: 0.75% (annualized), on the ETP Value held by securityholder, charged daily;
2. Margin Rate: Designated benchmark rate + 1.5% (annualized), on borrowed cash, charged daily.
Short/Inverse Exposures
1. Arranger Fee: 0.75% (annualized), on the ETP Value held by securityholder, charged daily;
2. Stock Borrow Rate: The current Borrow Rate (annualized) is published on LeverageShares.com on a daily basis.
*Interest Paid to Investors on Cash Balances: Designated benchmark rate – 1% (annualized), on cash holdings, paid/added to ETP Value daily.
- Higher Risk/Reward: Leveraged Exchange Traded Products (ETPs) provide magnified exposure to an underlying asset or benchmark and therefore can both gain or lose money much faster than investing in the underlying investment without leverage
- Daily Compounding Risk: To meet its objective of doubling the daily returns of an asset’s or benchmark’s performance, the leveraged ETP must rebalance, or re-leverage, its position every day. Over a longer holding period, the daily rebalancing may result in returns that do not equal the specified multiple of the benchmark due to the effects of compounding
- Investors can lose up to, but not more than, the full value of their investment, particularly in a volatile market environment
- The full risk warnings should be read before purchasing a leveraged ETP (they can be found here)
ETPs that are denominated in currencies different from that of the underlying stock are priced using interbank exchange rates. These are the ultracompetitive rates used by banks to transfer money between themselves.
Legal
No: Payments on Leverage Shares ETPs which receives US source dividends on are not subject to U.S. federal withholding tax under section 871 (m) of the Internal Revenue Code of 1986. Accordingly, brokers do not need to take any action with respect to section 871 (m).
Leverage Shares ETPs:
- Can be efficient tools for gaining magnified exposure to individual stocks
- Achieve leverage through margin borrowing
- Have physical ownership of the underlying stocks, and therefore do not use swaps or other derivatives to achieve their exposure
- Do not have credit risk, because each series of the special purpose vehicle (SPV) has physical ownership of the underlying stocks and does not use derivatives, like swaps, to achieve its leverage
- Trade in real time on the London Stock Exchange (LSE), Euronext Amsterdam (XAMS) and Borsa Italiana (XMIL)
- Prevent investors from losing more than their initial investment
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.
Leverage Shares is entitled to benefits under the U.S.-Ireland income tax treaty with respect to any U.S. source dividends it receives. Accordingly, Leverage Shares is subject to 15% withholding tax on U.S. source dividends.
Scenarios
Brokers onboard products to their platform based on customer demand. Kindly contact their help desk and request that they are added.Alternatively, please inform us about the issue so that our sales team can liaise with the broker directly.
Yes, Leverage Shares ETPs can continue to trade on regulated exchanges at very low prices, even a few pennies. Leverage Shares may execute a reverse split in order to bring the trading price back to higher levels (approximately $5).
The price change on the underlying due to a stock/reverse stock split has no influence on the price of the ETP. For example, in the case of a split, the ETP would receive the additional shares resulting from the split, so it would hold more shares at a lower price, leaving the price of the ETP identical.
The ETP(s) tracking the instrument would either:
- Begin tracking another product, possibly a European GDR listing or the locally listed stock in Asia;
- If there is no other liquid instrument that Leverage Shares can use, be redeemed – returning the value of invested amounts back to investors, net of fees and costs.
- In the unlikely scenario that an ETP is delisted or redeemed by Leverage Shares, the shares and instruments underlying such ETP (the “Collateral”) would be sold or unwound, and the resulting amounts returned to investors, net of applicable fees and costs.
- Leverage Shares ETPs are fully collateralised – this Collateral is held in favour of an independent trustee acting on behalf and for the benefit of investors.
- For more information, click here
The consolidation will result in an investor holding less ETPs with a proportionately higher ETP Security Value. An investor’s economic interest in a Series of ETP Securities will remain unchanged. For more information, clickhere.
A spin-off is considered an “Adjustment Event” requiring a modification to the index or investment strategy applicable to the Series of ETP Securities. In this case, the PM would sell the automatically acquired spin-off shares at the market close of the first business day post spin-off (or whenever the shares are available to trade by the PM, whichever comes first) and concurrently reinvest the proceeds into the underlying shares or basket matching the relevant index or investment strategy.
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By subscribing here, you agree with our Privacy Policy and you will receive our newsletters. You can unsubscribe at any time by following the link at the bottom of each newsletter.
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investors as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer. This material is not intended to be relied upon as a forecast, research or investment advice and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy. Any decision to invest should be based on the information contained in the relevant base prospectus after seeking independent investment, tax and legal advice.
© Leverage Shares 2024
Welcome to Leverage Shares
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If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.
If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.
Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
United States Visitors
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
Cookies
Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click herefor more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2.
By clicking you agree to the Terms and Conditions displayed.
Terms and Conditions
Notice
If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.
If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.
Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
United States Visitors
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
Cookies
Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2.
By clicking you agree to the Terms and Conditions displayed.
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