Assets under management at global inverse and leveraged exchange traded products resided at $61.5 billion at the end of last month, a 1% decline from the end of March, but still up 6% from the end of 2013.
BOOST ETP, which was recently acquired by WisdomTree (NasdaqGS: WETF), the fifth-largest U.S. ETF sponsor, said short and leveraged “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.” http://www.boostetp.com/
In terms of inverse and leveraged commodity products, gold, silver, oil and natural gas funds dominated April inflows. Until recently, natural gas had been one of this year’s top-performing commodities, but the VelocityShares Daily 3x Inverse Natural Gas ETN (NYSEArca: DGAZ) has surged 18% in just the past week. [Investors Departing Nat Gas ETFs]
“Currently there is record $43.4 billion of AUM held in S&L equity ETPs of which 64% is held in leveraged (long) ETPs. S&L equity ETPs have seen $149 million of outflows, a stark contrast from the $4.1 billion of inflows in March. $487 million of creations of short positions coincided with $636 million of redemptions from long positions,” according to Boost.
The largest short and leveraged ETFs by assets include the ProShares Short S&P500 (NYSEArca: SH), UltraShort S&P500 ProShares (NYSEArca: SDS) and the Direxion Daily Small Cap Bull 3X Shares (NYSEArca: TNA).