Leverage Shares: a fast-growing pioneer
Leverage Shares is a pioneer in the niche market of single-stock short and leveraged ETPs. These mimic the daily return of an underlying stock being tracked but are multiplied by a leverage factor of 3x, 2x or -1x; they track leading global growth stocks including Tesla, Apple, Amazon, Facebook, Microsoft and Baidu, as well as FTSE100 equities, such as Vodafone.
José Gonzalez is the CEO and founder of Leverage Shares. He is no stranger to the world of ETPs having co-founded Global X in 2008, a New York based pioneer of exchange traded funds. Developing index and thematic ETFs the business quickly grew to over $10 billion of assets. Leverage Shares was born when GlobalX ETF was acquired by Mirae Asset Global Investments in 2018.
José Carlos Gonzalez
CEO and Founder, Leverage Shares
Growing investor demand
"There is growing investor demand to trade the upside and the downside of leading global equities in a simple and secure manner, and in their own currency," says José Gonzalez.
“In addition to this, we realise that many of the popular stocks are hard for retail investors to access so have developed a range of stock tracker ETPs, i.e unlevered, that enable any investor to trade in stocks such as Amazon, on a fractional basis.”
The nature of these ETPs means that Leverage Shares has rapidly built up a large array of products. In a single day, it launched 28 separate products. Currently, it has 105 products listed. So while it may still be a relatively small firm, Leverage Shares' ETPs already constitute 5% of all ETPs listed on the London Stock Exchange.
London as the stepping stone for expansion
The firm has used London as its stepping stone from which it can expand into other European markets.
"The UK is the most advanced market in Europe and has the strongest investment culture," says Gonzalez. "In London you can list in multiple currencies - something that you can only do here. We list in dollars, sterling and euros, which allows our investors to trade in their preferred currencies."
The broad market ecosystem in London has been helpful to Leverage Shares as they build out their range of products. "It is a very well-established exchange and there are many service providers, market makers and brokers. This culture and knowledge, within an experienced jurisdiction, provides an efficient and stable environment in which to operate," Gonzalez says.
On the frontiers of innovation
And it enables Leverage Shares to keep on innovating. Recently it has launched Stock Tracker ETPs. These novel ETPs enable UK and other European investors to buy fractional (and unleveraged) shares in large overseas companies such as Tesla, Google and Amazon in multiples of $5.
“This is one of the most efficient ways for UK investors to trade in popular American and Asian stocks – and at a very low management fee. And here London has its additional time zone advantage, which means that it is a great place from which to trade in all the world’s main markets in your own time zone,” says Gonzalez.
He thinks that Leverage Shares is "at the frontier” of a significant shift in the investment market. “I want the market to grow faster but we will get there in time. I experienced this in 2008 with Global X. Like any innovation, it is important that we take the time to educate investors about how they work, the fact they are well-regulated and, especially for retail investors, in their potential in their investment portfolio – whether that be in an ISA or SIPP. Europe will follow the US migration to ETFs - almost everybody in the US uses ETFs nowadays because it is a simpler more cost-efficient solution for investors," he concludes.
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