REX Shares Launches Energy Long and Short MicroSectors ETNs Tracking Solactive Index
Oil & Gas are the main ingredients of a great variety of industrial products such as transportation fuels, plastics, solvents, and a source of electricity and heat generation. Recently, demand and supply for these commodities as well as their prices have been rising in volatility on a global basis, especially due to market concerns about energy shortages, Covid-19 restrictions in China, and a recession in the horizon. However, the restraints of Russian oil by the European Union, China’s reopening, and the prospect of a change in the Fed monetary policy can establish a different scenario for these commodities’ prices. Solactive is pleased to announce REX Shares, LLC (“REX”) launched two Exchange Traded Notes (ETNs) issued by Bank of Montreal (“BMO”) linked to the Solactive MicroSectors Energy Index (ticker: BIGOIL). The ETNs, MicroSectors Energy 3x Leveraged ETNs (ticker: WTIU) and MicroSectors Energy -3x Inverse Leveraged ETNs (ticker: WTID) started trading today on NYSE Arca.
Leveraged and inverse leveraged ETNs are designed to allow sophisticated investors to take high-conviction positions on the movement of an underlying benchmark. These types of ETNs reset every day, which means they are only designed to accomplish the stated leverage objective daily. Both WTIU and WTID ETNs utilize Solactive MicroSectors Energy Index as their underlying index, corresponding to three times (300%) long and inverse the daily performance of the underlying index, respectively.
The Solactive MicroSectors Energy Index tracks the performance of 12 highly liquid, U.S. domiciled and listed companies operating in the energy and oil sector, offering investors exposure to these sectors. To be eligible for inclusion in the index, the companies need to be classified as Integrated Oil and Gas Exploration and Production, Fossil Fuel Exploration and Production, or Petroleum Refineries.
“We are excited to partner with REX to bring these two new ETNs to market, a suite of leveraged and inverse leveraged offerings to give investors different possibilities to gain exposure to this important sector, as oil and gas remain the most important factor of the energy mix”, said Timo Pfeiffer, CMO at Solactive. “L&I products are increasingly gaining importance for investors who want to pursue short-term market views to generate capital gains, increase diversification, or hedge their positions.“
REX, a provider of alternative investment products, continues to see strong demand for hedging and trading tools based on specific segments of the market, such as equity securities of companies in the energy and oil sector.
“We are excited to expand on our existing energy related offerings with a new suite of leveraged and inverse leveraged exchange-traded notes,” said Scott Acheychek, CEO of REX. “The energy suite will provide investors with exposure to 12 highly liquid companies that are at the forefront of global energy trends,” Acheychek added. “Since founding MicroSectors in 2018, we have been dedicated to innovating the ETP landscape by offering unique exposures to popular investable market segments. We believe the addition of these ETNs to the product lineup furthers this objective.”