BNP Paribas has appointed the Quantitative Investment Strategies (QIS) group of Credit Suisse Asset Management (CSAM QIS) to act as the allocation agent for the CSAM QIS Dynamic Multi-Factor Diversified Strategy (DMD7) index.

The DMD7 index seeks to provide diversified exposures across a range of mutually complementary systematic investment indices offered by BNP Paribas, and offers access to a portfolio diversifier, in a synthetic format (unfunded) that aims to generate attractive performance while being broadly uncorrelated with stocks and bonds.

Under the agreement, BNP Paribas will continue to be the sponsors and calculating agent the DMD7 in accordance with its governance framework whilst CSAM QIS will oversee the analysis and selection of BNP Paribas’ underlying index components on behalf of DMD7, and actively manage DMD7’s index component allocations and risk exposures.

‘We see a clear added-value in working closely with an expert team such as CSAM QIS to select the appropriate components and actively rebalance the portfolio,’ said Alexandre Billot (pictured), quantitative strategies & solutions sales, BNP Paribas.

Bitcoin certificate becomes the most traded product on Frankfurt’s exchange

A Bitcoin-tracking certificate was again the most popular product on Frankfurt’s warrants’ exchange in 2020 with a turnover of €199m.

Younger investors are increasingly finding their way to the stock exchange - Simone Kahnt-Eckner

Overall, the trading volume on the exchange rose by 71% to €21.1 billion last year. The total number of executed orders in structured products amounted to almost four million in the past year.

The average order size decreased from €5,700 to €5,450 while the share of turnover of foreign participants amounted to 14.4% and was thus at the previous year's level. The number of executed orders was far higher than in 2019 (+79%).

‘Younger investors are increasingly finding their way to the stock exchange, realising that there is no way around investing in securities, especially in times of negative interest rates,’ said Simone Kahnt-Eckner, board member of Börse Frankfurt Zertifikate AG, the operator of the exchange. ‘The most traded investment certificates were trackers on cryptocurrencies. Structured products on underlyings such as gold, silver or industrial metals were also in high demand.’

Structured products help set turnover record on Boerse Stuttgart

The Stuttgart exchange has reported a significant increase in trading volume of equities, ETPs and securitised derivatives compared to November 2019.

Boerse Stuttgart generated turnover of around €9,8 billion in November 2020 – an increase of over 62% compared to the same month of the previous year.

Securitised derivatives made up the largest share of the turnover. The trading volume in this asset class was around €3,9 billion – over 62% more than in November 2019. Leverage products generated turnover of over €2,8 billion and investment products contributed over €1 billion to the total turnover.

According to the exchange’s order book, trading in equities produced turnover of over €3 billion – an increase of around 142% compared to November 2019. German equities contributed around €1,4 billion towards this total and international equities over €1,6 billion.

Turnover shown in the order book from exchange-traded products (ETPs) was over 1,9 billion – over 80% more than in November 2019 with investment fund units contributing over €217m to the November total.

Leverage Shares rolls out short & leveraged range in Amsterdam

Short & leveraged ETP provider on single stocks Leverage Shares has cross-listed 40 ETPs on Euronext Amsterdam.

The range tracks individual US stocks, including the most popular names such as Tesla, Apple, Amazon, Facebook, Microsoft, Nvidia and others, and is designed to mimic the daily return of the underlying stock being tracked, multiplied by a leverage factor of 3x (triple leveraged), 2x (double leveraged) or -1x (inverse).

‘This is about democratising access to strategies once reserved for fund managers, like trading with leverage and going short,’ said Oktay Kavrak, product strategy at Leverage Shares. ‘What we have been seeing is that European investors have an appetite for trading with conviction, yet the majority prefer doing so on a regulated exchange.’

All of Leverage Shares’ ETPs are fully physically backed with the underlying shares. Holders of the ETPs incur no margin calls or overnight fees but are charged a fee of 0.75% per annum and market standard margin rates plus returns on the cash collateral. All 40 of the ETPs are available on Euronext Amsterdam in EUR.

ETC Group enters Swiss market

ETC Group has announced that its rapidly growing Bitcoin ETC, BTCetc Bitcoin exchange traded crypto (BTCE), which last week reached US$500m assets under management (AUM), was listed on the Swiss stock exchange (SIX), yesterday 13 January.

This will be the ETP’s second listing, after its first listing on Deutsche Börse’s Xetra platform in June 2020, where it has been the most traded product on its ETN segment. The BTCE will trade in US dollars (USD), Swiss francs (CHF) and British pounds (GBP) on SIX.

The exchange-traded cryptocurrency (ETC), available on HANetf’s white label ETP platform, is 100% physically backed.

BTCE gives investors several benefits over investing directly in Bitcoin. Traded on regulated markets, investors can buy and sell the product in the same way they would when trading conventional shares or ETPs.

BTCE is structured as an ETC that is physically backed by bitcoin - each unit of BTCE gives the holder a claim on a predefined amount of Bitcoin - a structure very similar to physically-backed gold exchange traded commodities, and allows investors the option for redemption in Bitcoin.  For every unit of BTCE, there is Bitcoin stored in regulated, institutional-grade safe custody.

China speeds up development of derivatives market

Chinese watchdog China Securities Regulatory Commission (CSRC) has moved to further open up the domestic derivative markets including futures in a response to a growing demand in the post-Covid 19 era.

The country is accelerating to roll out new commodity futures and options including natural gas, refined oil, peanuts and 30-year treasury, said Fang Xinghai, vice chairman of the CSRC at a forum on 19 December. 

‘China’s futures and options market remains at an early stage of development at present,’ he said. ‘It’s far from meeting the rising risk management needs of market participants and adapting to the latest development and requirements of the country’s real economy and financial reform as well as innovation. It’s necessary to moderately accelerate the development of the domestic derivatives market.’ 

Fang also highlighted the ‘Futures Act’ that’s proceeding and the need for diversity of futures market participants. In June, J.P. Morgan received regulatory approval to increase its stake in J.P. Morgan Futures from 49% to 100%, becoming the first wholly foreign-owned futures company in China. 

Hog futures began trading on the Dalian Commodity Exchange on 8 January as the first live underlying linked to futures in China.