UK investors are now able to add exposure to Chinese tech Shares into their stocks and shares ISA account thanks to a new and innovative product from Leveraged Shares. Who are probably best known for their range of leveraged and inverse single-stock ETPs (Exchange Traded Products) that allow traders to take a leveraged long or short position on individual blue-chip equities.
Something that the Good Money Guide covered when it interviewed Leveraged Shares CEO José Carlos Gonzalez in November 2020.
The company’s latest innovation are single name ETPs that confer fractional tracking exposure over a range of high priced foreign equities such as Amazon Inc, which at $3300 a pop are just too expensive for many investors to own or hold.
How do the tracker ETPs work?
The new ETPs will offer a delta one exposure to the underlying stocks they are over and will be backed or hedged by physical holdings in those securities. Delta one simply means that the price change of the ETPs will exactly mirror the price change of the underlying equity in percentage terms.
However, each of the new trackers has been initiated at a price and NAV of $5.00 per share making them far more affordable and convenient to trade. The trackers will be available to investors in three separate denominations, US dollars, British pounds and Euros.
What can you trade?
Leveraged Shares launched the new ETPs last week with a dozen trackers over individual US equities such as Amazon, Shopify, Airbnb and Facebook. And as of the 16th of June, they have added trackers over a series of Chinese tech disruptors, such as JD.com, Baidu, NIO and SEA.
Leveraged Shares are breaking new ground here because to date Chinese equities have not been ISA eligible.
However, because these new fractional tracking ETPs are listed in London they do meet ISA eligibility criteria, and in doing so they open up a whole new avenue of investment possibilities for the UK’s ISA holders, who can now gain fractional exposure to these stocks in sterling terms.
How can you trade them?
Brokers such as AJ Bell and Hargreaves Lansdown are already able to trade in Leveraged Share’s products and the new offerings should be available for clients to trade straight away. In fact, Leveraged Shares has a list of more than 20 UK brokers who can trade in their products for retail clients.
Leveraged shares now offer 100 leveraged ETPs and trackers across its product range and these instruments offer an exchange-traded alternative to CFDs and an opportunity to access an economic interest in stocks, that have previously been out of reach for many retail investors and savers.
This is just the kind of innovation that London’s markets are renowned for and we look forward to seeing what comes next.
Darren is a veteran of the financial markets with almost 36 years of experience under his belt. He has worked in trading, sales, analytical, and research roles, he has been a regular guest & commentator on financial television channels and publications. During his career, Darren has been fortunate to act for and advise major hedge funds and investment banks as well as HNWI. Darren analyses the markets using a blend of technical and fundamental analysis