SHORT & LEVERAGED ETPsGlobal Flows

Octo

WisdomTree

Short and leveraged exchange-traded products are only intended for investors who understand the risks involved in investing in a product with short and/or leveraged exposure and who intend to invest on a short term basis. Any investment in short and/or leveraged products should be monitored on a daily basis to ensure consistency with your investment strategy. You should understand that investments in short and/or leveraged exchange-traded products held for a period of longer than one day may not provide returns equivalent to the return from the relevant unleveraged

comparison to investments that do not incorporate these strategies. Please refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in short and/or leveraged exchange-traded products. You should consult an independent investment adviser prior to making an investment in short and/or leveraged exchange-traded products in order to determine its suitability to your circumstances.

2

Importance of WisdomTree Short & Leveraged ETPs Report

Money moves fast in the Short & Leveraged (S&L) world and around $85 billion as of 31/10/2020 sits within Short & Leveraged

ETPs. The WisdomTree Short & Leveraged ETP report tries to make sense of the money moving in and out of S&L ETPs.

Solely looking at inflows and outflows of long-only ETPs fails to present the true picture of investor sentiment. We believe a

better measure of sentiment is to try and understand how bullish or how bearish investors are on a particular market.

Investors allocating to 3x leveraged exposures demonstrates a bullish sentiment better than looking at long-only ETP inflows.

Similarly, a 3x short exposure would demonstrate a bearish view better than looking at long-only ETP outflows.

By illustrating S&L ETPs flows, the WisdomTree Short & Leveraged ETP report provides a nuanced view of investor sentiment

for the past month across a range of exposures which cannot be seen using trading flow data.

About the WisdomTree S&L ETP flows report

WisdomTree is a market leading S&L ETP issuer, providing unique data through its monthly S&L ETP flows report. The

WisdomTree S&L ETP flows report is compiled through a proprietary global Short & leveraged ETP database which covers and

categorises every S&L ETP globally in terms of the underlying investment and leverage factors.

All data provided in this report is sourced from calculations by WisdomTree, which are performed on underlying price,

return, AUM, currency and market capitalisation data from Bloomberg®. All data is as of 31 October 2020. All figures are

denominated in USD.

You cannot invest directly in an index. Historical performance is not an indication of future performance and any

investments may go down in value.

3

Executive Summary

S&L investors took bearish positions in USA equities in October

• Investors in S&L ETPs closed their 3x leveraged long positions in USA equities highlighting a bearish sentiment

towards this market segment last month.

• US equities had a challenging month in October. The S&P 500 Index was down over 2.7% while the NASDAQ

100 Index was down 3.2% during the month. US election uncertainty and the associated delay in the next fiscal

stimulus along with rising coronavirus infections in a second wave around the world weighed on risk

sentiment.

S&L Investors closed out their long positions in gold, silver, and natural gas

• S&L investors closed their 3x leveraged long positions in gold and silver in October. The two precious metals

remained under pressure last month and prices generally moved sideways as broader market volatility ahead of US

elections kept prices across risk and defensive assets in check.

• S&L investors also closed 2x and 3x leveraged natural gas positions possibly to lock in profits. Natural gas bucked the

trend among energy commodities last month and experienced a strong price rally as hurricanes in the Gulf of Mexico

caused production facilities to shut. Further support came from expectations of higher residential heating demand in

the US between October and March.

4

Uncertainty around the US presidential election results and the ongoing health crisis drive S&L investor behaviour

• In October, S&L investors increased slightly their positions in both long and short US government bond ETPs

(+$14mln and +$38mln respectively). The sentiment seems to be highly geared towards uncertainty about the results

of the US presidential election and the consequent policies that will impact future economic growth. As an

agreement on more fiscal stimulus ahead of the US presidential election became less likely, some investors took the

view that US 10 year Treasury yields could fall meanwhile a greater tilt of investors started to position themselves for

the possibility of higher growth and inflation.

• Investors in S&L ETPs also increased their positioning in 2x short Italy Government Bond ETPs by $25mln. As the

number of Covid-19 cases across Europe steadily rose in October, some investors positioned themselves for a

possibility of rising Italian government bond yields in fear that a similar spread widening relative to German

government bonds could occur as was the case during the height of the health crisis earlier this year.

• Investors in S&L ETPs increased their positions in 1x short South Korea government bond ETPs by $290mln and

represented the largest conviction from S&L investors within our data set. In late September, South Korea’s

parliament approved the fourth supplementary budget to aid the local economy amid tight social distancing

restrictions in place and provided a signal to the market about the government’s commitment to support the

economy amid the health crisis.

Global Asset Allocation

• The total global AUM of Short & Leveraged (S&L) ETPs was $84.5billion as of 31/10/2020

• 43% of AUM is held in short products with leverage factors ranging between -1x to -3x. 57% of AUM is held in long

products with leverage factors ranging from +2 and above. The leverage factor with the most assets is +2x, with 29%

of AUM.

• In terms of S&L asset allocation, equity ETPs are the most popular with 87% of AUM, followed by commodities with

8% and debts with 4%. The remainder is allocated between currency and alternative ETPs.

All data provided in this report is sourced from calculations by WisdomTree, which are performed on underlying price,

return, AUM, currency and market capitalisation data from Bloomberg®. All data is as of 31 October 2020. All figures are

denominated in USD.

You cannot invest directly in an index. Historical performance is not an indication of future performance and any

investments may go down in value.

5

Table of Contents

Importance of WisdomTree Short & Leveraged ETPs Report ..................................................................................... 2

Executive Summary .............................................................................................................................................. 3

Global Growth of S&L ETFs/ETPs ............................................................................................................................ 6

Global Asset Allocation .......................................................................................................................................... 7

Short & Leveraged Equities .................................................................................................................................... 9

Global Equities ........................................................................................................................................................................................... 9

European Equities Breakdown ............................................................................................................................................................... 11

Short & Leveraged Government Debt .................................................................................................................... 13

Global Debt .............................................................................................................................................................................................. 13

Short & Leveraged Commodities .......................................................................................................................... 15

Global Commodities ................................................................................................................................................................................ 15

Short & Leveraged Currencies .............................................................................................................................. 17

Global Currencies .................................................................................................................................................................................... 17

Data, Methodology and Terms Used ...................................................................................................................... 19

6

AUM and Number of Products

AUM by Leverage Factor As of 31st October 2020

AUM by Asset Class As of 31st October 2020

AUM by Domicile Region As of 31st October 2020

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

AUM 88 1,576 6,193 27,381 38,957 41,477 46,733 43,799 57,143 58,989 67,853 70,492 84,227 74,226 77,347 84,512

Num. of ETPs 9 29 117 286 385 513 713 820 811 880 983 1028 1122 1051 869 670

0

200

400

600

800

1000

1200

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Nu

mb

er

of P

rod

uc

ts

AU

M, U

SD

Mil

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

3x 638 2,863 4,544 5,151 5,023 6,692 9,915 11,127 11,263 17,199 16,092 20,469 23,146

2x 82 601 1,615 13,577 12,762 13,120 12,158 13,695 21,536 22,971 27,758 25,267 32,744 30,453 29,983 24,016

-1x 6 649 1,084 2,796 6,370 6,928 12,928 10,860 12,393 11,603 13,780 15,942 17,292 15,169 11,351 17,357

-2x 327 3,494 10,081 14,512 13,769 12,866 10,845 12,441 9,777 9,506 11,707 10,873 7,947 9,286 11,805

-3x 288 2,427 2,909 3,370 3,016 3,530 3,662 4,269 5,310 4,471 4,018 5,154 6,091

Other 23 207 245 208 195 209 212 223 448 395 273 191

0

10,000

20,000

30,000

40,00050,000

60,000

70,000

80,000

90,000

AU

M, U

SD M

illio

ns

Other0%

-3x8%

-2x14%

-1x21%

2x29%

3x28%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Alternative 81 830 914 945 2,262 2,586 1,697 3,427 1,269 1,471 473

Currency 33 270 562 907 1,620 1,200 1,386 1,456 1,200 1,185 1,083 712 541 491

Commodity 38 2,111 3,915 4,951 4,921 4,831 3,744 3,985 5,593 6,054 7,070 5,467 7,031 6,646

Debt - Debt 1,695 5,435 7,943 7,501 7,914 11,547 8,720 8,217 8,308 9,555 6,805 3,365 3,216

Equity 88 1,576 6,122 23,304 29,022 27,387 31,569 28,660 39,073 42,036 49,565 52,599 62,456 59,915 64,257 71,984

010,00020,00030,00040,00050,00060,00070,00080,00090,000

AU

M, U

SD

Mil

Equity

87%

Debt

4%

Commodity

8%

Currency

1%

Altern

ative

0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Latin America 12 28 34 45 124 59 8 59 38 23 19

Middle East & Africa 6 290 21 35 93 90 3,764 3,288 4,310 3,737 3,602 3,491 3,652 2,820

Europe 82 326 1,166 2,918 5,889 6,873 7,511 7,257 7,365 7,265 8,088 8,632 11,149 8,455 7,282 7,969

Asia-Pacific 43 319 1,583 2,172 4,662 7,085 14,468 17,027 19,841 22,370 19,330 25,904

North America 961 5,006 24,428 32,908 33,974 33,596 30,767 40,351 40,248 40,945 40,687 48,910 40,501 50,030 48,919

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

AU

M, U

SD

Mil

North

America

59%

Asia-

Pacific

31%

Europe

10%

Latin

America

0%

Global Growth of S&L ETFs/ETPs

7

Global Asset Allocation

Current Allocations As of 31st October 2020; Figures in USD Mil.

AUM

October 2020 Flows Over October 2020; Figures in USD Mil.

Asset Flows

AUM by Leverage Factor Asset Flows by Leverage Factor

Notional AUM by Long / Short ETPs The sum of the AUM in each ETP multiplied by the absolute value of its leverage factor.

E.g., $1 of assets in a 3x leverage or a 3x short ETP equals $3 of notional AUM

Notional Flows by Long / Short ETPs The net subscriptions for each ETP multiplied by the absolute value of its leverage

factor. E.g., $1 of outflows from a 3x leverage ETP equals -$3 of notional flow

Net Position The notional AUM in long ETPs minus the notional AUM in short ETPs. A negative figure

indicates investors have a net short, or net bearish position; a positive figure indicates a

net long or net bullish position

Net Position Flows The notional flow in long ETPs minus the notional flow in short ETPs. A negative figure

indicates net bearish flows, while a positive figure indicates net bullish flows

71,984

3,216 6266,646

2,063

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Equity Debt Currency Commodity Alternative

-1,778

523

-2

41 157

-2,000

-1,500

-1,000

-500

0

500

1,000

Equity Debt Currency Commodity Alternative

Equity Debt Currency Commodity Alternative

Other 12 179

3x 21,272 309 35 1,530

2x 19,433 130 62 4,392

-1x 15,191 1,586 108 338 134

-2x 10,302 1,029 139 334

-3x 5,786 150 102 52

010,00020,00030,00040,00050,00060,00070,00080,000

Equity Debt Currency Commodity Alternative

Other 0 0 0

3x -1,907 8 5 3

2x -668 10 0 69 12

-1x 697 473 -7 -36 -59

-2x -5 29 -1 -2

-3x 105 3 0 7

-3,000-2,500-2,000-1,500-1,000

-5000

5001,000

Equity Debt Currency Commodity Alternative

Long 102,680 1,187 394 13,374 92

Short 53,157 4,156 637 1,163 427

0

20,000

40,000

60,000

80,000

100,000

120,000

Equity Debt Currency Commodity Alternative

Long -7,057 43 26 147 24

Short 1,001 541 5 -19 -59

-8,000

-7,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

49,523

-2,969 -243

12,211

-336-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

Equity Debt Currency Commodity Alternative

-8,057

-498

21 165 83

-9,000

-8,000

-7,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

Equity Debt Currency Commodity Alternative

8

Global Asset Allocation - Historical View

Net Position and Average Investor Leverage Cumulative Asset Flows into Short / Long ETPs

and Net Position Flows

All

Eq

uit

ies

All

Bo

nd

s A

ll C

om

mo

dit

ies

All

Cu

rre

nci

es

0.20x

0.40x

0.60x

0.80x

1.00x

1.20x

1.40x

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Ave

rage

inve

sto

r Le

vera

ge

Net

Po

siti

on

($m

)

Net Position, ($m, LHS)

Average Investor Leverage (RHS)

-160,000

-140,000

-120,000

-100,000

-80,000

-60,000

-40,000

-20,000

0

20,000

40,000

Net Position Flow ($m)

Asset Flows into Long ETPs ($m)

Asset Flows into Short ETP ($m)

-1.60x

-1.40x

-1.20x

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

0.50x

1.00x

1.50x

2.00x

2.50x

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

-5,000

0

5,000

10,000

15,000

20,000

-1.20x

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

-900

-800

-700

-600

-500

-400

-300

-200

-100

0

-400

-200

0

200

400

600

800

1,000

9

Short & Leveraged Equities Global Equities Current Allocations By Geographic Exposure; As of 31st October 2020; Figures in USD Mil.

“Europe” represents the sum total of ETPs exposed to Europe or European countries.

AUM

October 2020 Flows By Geographic Exposure; During October 2020; Figures in USD Mil.

Asset Flows

AUM by Leverage Factor Asset Flows by Leverage Factor

Notional AUM by Long / Short ETPs The sum of the AUM in each ETP multiplied by the absolute value of its leverage factor.

E.g., $1 of assets in a 3x leverage or a 3x short ETP equals $3 of notional AUM

Notional Flows by Long / Short ETPs The net subscriptions for each ETP multiplied by the absolute value of its leverage

factor. E.g., $1 of outflows from a 3x leverage ETP equals -$3 of notional flow

Net Position The notional AUM in long ETPs minus the notional AUM in short ETPs. A negative figure

indicates investors have a net short, or net bearish position; a positive figure indicates a

net long or net bullish position

Net Position Flows The notional flow in long ETPs minus the notional flow in short ETPs. A negative figure

indicates net bearish flows, while a positive figure indicates net bullish flows

41,601

138 190 20 301,988

4,232

305 53 1422,287

315 191

7,623 7,2734,857

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

US

A

Can

ad

a

Bra

zil

LatA

m B

roa

d

Mex

ico

Au

stra

lia

Ch

ina

HK

Ind

ia

Jap

an

S K

ore

a

Ta

iwan

N.America LatAm GlobalEurope EM DM Asia-Pacific

-1,704

1

-52

184

-11

4 1

-201 -155 -46

-275 -69

512

-2,000

-1,500

-1,000

-500

0

500

1,000

US

A

Can

ad

a

Au

stra

lia

Ch

ina

HK

Ind

ia

Jap

an

S K

ore

a

Ta

iwan

N.America Global Europe EM DM Asia-Pacific

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

US

A

Can

ad

a

Bra

zil

LatA

m B

roa

d

Mex

ico

Au

stra

lia

Ch

ina

HK

Ind

ia

Jap

an

S K

ore

a

Ta

iwan

N.America LatAm GlobalEurope EM DM Asia-Pacific

-3x -2x -1x 2x 3x

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

US

A

Can

ad

a

Bra

zil

LatA

m B

roa

d

Mex

ico

Au

stra

lia

Ch

ina

HK

Ind

ia

Jap

an

S K

ore

a

Ta

iwan

N. America LatAm GlobalEurope EM DM Asia-Pacific

-3x -2x -1x 2x 3x

75,0

97

109

483

61 54

5,19

7

2,34

1

541

47 284 4,

286

444

339 6,

548

6,25

7

558

26,3

17

145

56 0 8 613 4,

631

199

38 0 391

93 120

8,06

7

6,54

0

4,57

9

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

US

A

Can

ad

a

Bra

zil

LatA

m B

roa

d

Mex

ico

Au

stra

lia

Ch

ina

HK

Ind

ia

Jap

an

S K

ore

a

Tai

wan

N.America LatAm GlobalEurope EM DM Asia-Pacific

Long Short

-5,714

3

-2

6 0

-19

72

-28

0 2

-608 -304

-38 -495

45 23 523

-2 -4

0 0

-142

140 9 4 0 87

-3 -63

-68 -54

500

-7,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

US

A

Can

ad

a

Bra

zil

LatA

m B

road

Mex

ico

Au

stra

lia

Ch

ina

HK

Ind

ia

Jap

an

S K

ore

a

Ta

iwan

N.America LatAm GlobalEurope EM DM Asia-Pacific

Long Short

48,780

-36

426 61 46

4,583

-2,290

342 9 284

3,895

351 219

-1,519 -283 -4,021 -10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

US

A

Can

ad

a

Bra

zil

LatA

m B

roa

d

Mex

ico

Au

stra

lia

Ch

ina

HK

Ind

ia

Jap

an

S K

ore

a

Ta

iwan

N.America LatAm GlobalEurope EM DM Asia-Pacific

-6,238

5 2 6 0 123

-69 -36 -4

2

-695 -301

26

-426

99

-477

-7,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

US

A

Can

ad

a

Bra

zil

LatA

m B

road

Mex

ico

Au

stra

lia

Ch

ina

HK

Ind

ia

Jap

an

S K

ore

a

Tai

wan

N.America LatAm GlobalEurope EM DM Asia-Pacific

10

Global Equities - Historical View

Net Position and Average Investor Leverage Cumulative Asset Flows into Short / Long ETPs

and Net Position Flows

US

Eq

uit

ies

All

Eu

rop

e E

qu

itie

s J

ap

an

Eq

uit

ies

EM

Eq

uit

ies

Ch

ina

Eq

uit

ies

0.20x

0.40x

0.60x

0.80x

1.00x

1.20x

1.40x

1.60x

1.80x

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Ave

rage

Inve

sto

r Le

vera

ge

Net

Po

siti

on

($m

)

Net Position, ($m, LHS)

Average Investor Leverage (RHS)

-60,000

-50,000

-40,000

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

Net Position Flow ($m)

Asset Flows into Long ETPs ($m)

Asset Flows into Short ETP ($m)

-0.80x

-0.60x

-0.40x

-0.20x

0.20x

0.40x

0.60x

-3,000

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

-0.60x

-0.40x

-0.20x

0.20x

0.40x

0.60x

0.80x

1.00x

1.20x

1.40x

1.60x

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

0.20x

0.40x

0.60x

0.80x

1.00x

1.20x

1.40x

0

100

200

300

400

500

600

700

-300

-200

-100

0

100

200

300

0.20x

0.40x

0.60x

0.80x

1.00x

1.20x

1.40x

1.60x

1.80x

2.00x

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

-8,000

-7,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

11

European Equities Breakdown Current Allocations By Geographic Exposure; As of 31st October 2020; Figures in USD Mil.

“Europe” represents ETPs exposed to Europe as a region.

AUM Showing countries with AUM above $10mm

October 2020 Flows By Geographic Exposure; Over October 2020; Figures in USD Mil.

Asset Flows

AUM by Leverage Factor Asset Flows by Leverage Factor

Notional AUM by Long / Short ETPs The sum of the AUM in each ETP multiplied by the absolute value of its leverage factor.

E.g., $1 of assets in a 3x leverage or a 3x short ETP equals $3 of notional AUM

Notional Flows by Long / Short ETPs The net subscriptions for each ETP multiplied by the absolute value of its leverage

factor. E.g., $1 of outflows from a 3x leverage ETP equals -$3 of notional flow

Net Position The notional AUM in long ETPs minus the notional AUM in short ETPs. A negative figure

indicates investors have a net short, or net bearish position; a positive figure indicates a

net long or net bullish position

Net Position Flows The notional flow in long ETPs minus the notional flow in short ETPs. A negative figure

indicates net bearish flows, while a positive figure indicates net bullish flows

1,165

775

1,473

439

346

101 64

168

0

200

400

600

800

1,000

1,200

1,400

1,600

Europe France Germany Italy Portugal Russia Spain Switz. UK

158

42

-7

6

-0 -1 -2 -5 -6 -20

0

20

40

60

80

100

120

140

160

180

Europe France Germany Italy Portugal Russia Spain Switz. UK

0

200

400

600

800

1,000

1,200

1,400

1,600

Europe France Germany Italy Portugal Russia Spain Switz. UK

-3x -2x -1x 2x 3x

-50

0

50

100

150

200

Europe France Germany Italy Portugal Russia Spain Switz. UK

-3x -2x -1x 2x 3x

436 48

5 558

442

6

138

146

0

129

1,21

1

872

1,75

0

440

0 0

56

127 17

6

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Europe France Germany Italy Portugal Russia Spain Switz. UK

Long Short

-2

44

21

-6 -0

-4

3 0

16

150

36

-14

6 0 0

-8 -11 -18

-40

-20

0

20

40

60

80

100

120

140

160

Europe France Germany Italy Portugal Russia Spain Switz. UK

Long Short

-774

-387

-1,192

2 6

138 90

-127 -47

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

200

400

Europe France Germany Italy Portugal Russia Spain Switz. UK

-152

9

35

-12 -0 -4

11 11

33

-200

-150

-100

-50

0

50

Europe France Germany Italy Portugal Russia Spain Switz. UK

12

Europe Equities - Historical View

Net Position and Average Investor Leverage Cumulative Asset Flows into Short / Long ETPs

and Net Position Flows

Bro

ad

Eu

rop

e E

qu

itie

s U

K E

qu

itie

s G

erm

an

y E

qu

itie

s It

aly

Eq

uit

ies

Fra

nce

Eq

uit

ies

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

0.20x

0.40x

0.60x

0.80x

-1,500

-1,000

-500

0

500

1,000

1,500

Ave

rage

Inve

sto

r Le

vera

ge

Net

Po

siti

on

($m

)

Net Position, ($m, LHS)

Average Investor Leverage (RHS)

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

Net Position Flow ($m)

Asset Flows into Long ETPs ($m)

Asset Flows into Short ETP ($m)

-1.20x

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

0.20x

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

20

-100

-50

0

50

100

150

-0.90x

-0.80x

-0.70x

-0.60x

-0.50x

-0.40x

-0.30x

-0.20x

-0.10x

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

-1,500

-1,000

-500

0

500

1,000

-0.60x

-0.40x

-0.20x

0.20x

0.40x

0.60x

0.80x

-200

-150

-100

-50

0

50

100

150

200

250

300

-800-700-600-500-400-300-200-100

0100200300

-1.20x

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

0.20x

0.40x

0.60x

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

200

400

600

13

Short & Leveraged Government Debt Global Debt Current Allocations By Geographic Exposure; As of 31st October 2020; Figures in USD Mil.

AUM Showing countries with AUM above $10mm

October 2020 Flows By Geographic Exposure; Over October 2020; Figures in USD Mil.

Asset Flows

AUM by Leverage Factor Asset Flows by Leverage Factor

Notional AUM by Long / Short ETPs The sum of the AUM in each ETP multiplied by the absolute value of its leverage factor.

E.g., $1 of assets in a 3x leverage or a 3x short ETP equals $3 of notional AUM

Notional Flows by Long / Short ETPs The net subscriptions for each ETP multiplied by the absolute value of its leverage

factor. E.g., $1 of outflows from a 3x leverage ETP equals -$3 of notional flow

Net Position The notional AUM in long ETPs minus the notional AUM in short ETPs. A negative figure

indicates investors have a net short, or net bearish position; a positive figure indicates a

net long or net bullish position

Net Position Flows The notional flow in long ETPs minus the notional flow in short ETPs. A negative figure

indicates net bearish flows, while a positive figure indicates net bullish flows

1,543

59

702

185

9

399

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

USA Europe Germany Italy UK S Korea

North America Europe Asia-Pacific

52

-5

2

33

1

290

-50

0

50

100

150

200

250

300

350

USA Europe Germany Italy UK S Korea

North America Europe Asia-Pacific

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

USA Europe Germany Italy UK S Korea

North America Europe Asia-Pacific

-3x -2x -1x 2x 3x Other

-50

0

50

100

150

200

250

300

350

USA Europe Germany Italy UK S Korea

North America Europe Asia-Pacific

-3x -2x -1x 2x 3x Other

1,11

9

0 32 25 1 0

1,94

6

59

1,05

3

359

25

399

0

500

1,000

1,500

2,000

2,500

USA Europe Germany Italy UK S Korea

North America Europe Asia-Pacific

Long Short

37 0

-0

7

-0

0

51

-5 -2

56

3

290

-50

0

50

100

150

200

250

300

350

USA Europe Germany Italy UK S Korea

North America Europe Asia-Pacific

Long Short

-827

-59

-1,021

-335

-24

-399

-1,200

-1,000

-800

-600

-400

-200

0

USA Europe Germany Italy UK S Korea

North America Europe Asia-Pacific

-14

5 2

-49

-3

-290 -350

-300

-250

-200

-150

-100

-50

0

50

USA Europe Germany Italy UK S Korea

North America Europe Asia-Pacific

14

Global Debt - Historical View

Net Position and Average Investor Leverage Cumulative Asset Flows into Short / Long ETPs

and Net Position Flows

US

Gv

t B

on

ds

Eu

rop

e G

vt

Bo

nd

s G

erm

an

y G

vt

Bo

nd

s It

aly

Gv

t B

on

ds

-1.80x

-1.60x

-1.40x

-1.20x

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

Ave

rage

Inve

sto

r Le

vera

ge

Net

Po

siti

on

($m

)

Net Position, ($m, LHS)

Average Investor Leverage (RHS)

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

Net Position Flow ($m)

Asset Flows into Long ETPs ($m)

Asset Flows into Short ETP ($m)

-1.20x

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

-500

-450

-400

-350

-300

-250

-200

-150

-100

-50

0

-400

-300

-200

-100

0

100

200

300

400

-1.60x

-1.55x

-1.50x

-1.45x

-1.40x

-1.35x

-1.30x

-1.25x

-1.20x

-3,500

-3,000

-2,500

-2,000

-1,500

-1,000

-500

0

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

-2.50x

-2.00x

-1.50x

-1.00x

-0.50x

-900

-800

-700

-600

-500

-400

-300

-200

-100

0

-300

-200

-100

0

100

200

300

400

15

Short & Leveraged Commodities Global Commodities Current Allocations By commodity exposure; As of 31st October 2020; Figures in USD Mil;

Showing the top 10 AUM commodity exposures

AUM Showing commodity exposures with the top 10 AUMs

October 2020 Flows By commodity exposure; Over October 2020; Figures in USD Mil;

Showing the Flows for top 10 AUM commodity exposures

Asset Flows

AUM by Leverage Factor Asset Flows by Leverage Factor

Notional AUM by Long / Short ETPs The sum of the AUM in each ETP multiplied by the absolute value of its leverage factor.

E.g., $1 of assets in a 3x leverage or a 3x short ETP equals $3 of notional AUM

Notional Flows by Long / Short ETPs The net subscriptions for each ETP multiplied by the absolute value of its leverage

factor. E.g., $1 of outflows from a 3x leverage ETP equals -$3 of notional flow

Net Position The notional AUM in long ETPs minus the notional AUM in short ETPs. A negative figure

indicates investors have a net short, or net bearish position; a positive figure indicates a

net long or net bullish position

Net Position Flows The notional flow in long ETPs minus the notional flow in short ETPs.

A negative figure indicates net bearish flows, while a positive figure indicates net bullish

flows

20

957

199

2,647

41

468

2,134

29 29 30

0

500

1,000

1,500

2,000

2,500

3,0000

-33

10

-24

-2

-42

-49

-2

0

11

-60

-50

-40

-30

-20

-10

0

10

20

0

500

1,000

1,500

2,000

2,500

3,000

-3x -2x -1x 2x 3x Other

-80

-60

-40

-20

0

20

40

-3x -2x -1x 2x 3x Other

0

1,809

333

4,854

79

695

5,360

9 24 79 20 156 51371

8276 186 25 23 0

0

1,000

2,000

3,000

4,000

5,000

6,000

Long Short

0

-115

12 40

-7

-174

-138

-3 -1

29

0 5 6

-53

2

56

-16

0 2 0

-200

-150

-100

-50

0

50

100

Long Short

-20

1,653

281

4,483

71 420

5,174

-16

1 79

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

0

-121

6

93

-9

-229

-122

-3 -2

29

-250

-200

-150

-100

-50

0

50

100

150

16

Global Commodities - Historical View

Net Position and Average Investor Leverage Cumulative Asset Flows into Short / Long ETPs

and Net Position Flows

Go

ld

Sil

ve

r C

op

pe

r O

il

Na

tura

l Ga

s

0.50x

1.00x

1.50x

2.00x

2.50x

3.00x

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Ave

rage

Inve

sto

r Le

vera

ge

Net

Po

siti

on

($m

)

Net Position, ($m, LHS)

Average Investor Leverage (RHS)

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Net Position Flow ($m)

Asset Flows into Long ETPs ($m)

Asset Flows into Short ETP ($m)

0.50x

1.00x

1.50x

2.00x

2.50x

0

500

1,000

1,500

2,000

2,500

3,000

-900

-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

-0.20x

-0.10x

0.10x

0.20x

0.30x

0.40x

0.50x

-5

0

5

10

15

20

-20

-15

-10

-5

0

5

10

0.20x

0.40x

0.60x

0.80x

1.00x

1.20x

1.40x

1.60x

1.80x

2.00x

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

-0.50x

0.50x

1.00x

1.50x

2.00x

2.50x

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

-2,000

0

2,000

4,000

6,000

8,000

10,000

17

Short & Leveraged Currencies Global Currencies Current Allocations By currency exposure; As of 31st October 2020; Figures in USD Mil;

Showing the top 10 AUM currency exposures

AUM Showing currency exposures with the top 10 AUMs

October 2020 Flows By currency exposure; Over October 2020; Figures in USD Mil;

Showing the Flows for top 10 AUM currency exposures

Asset Flows

AUM by Leverage Factor Asset Flows by Leverage Factor

Notional AUM by Long / Short ETPs The sum of the AUM in each ETP multiplied by the absolute value of its leverage factor.

E.g., $1 of assets in a 3x leverage or a 3x short ETP equals $3 of notional AUM

Notional Flows by Long / Short ETPs The net subscriptions for each ETP multiplied by the absolute value of its leverage

factor. E.g., $1 of outflows from a 3x leverage ETP equals -$3 of notional flow

Net Position The notional AUM in long ETPs minus the notional AUM in short ETPs. A negative figure

indicates investors have a net short, or net bearish position; a positive figure indicates a

net long or net bullish position

Net Position Flows The notional flow in long ETPs minus the notional flow in short ETPs.

A negative figure indicates net bearish flows, while a positive figure indicates net bullish

flows

104

38

13

218

13 7 2

88

5 2

0

50

100

150

200

2502

-0 -0

4

0 0 0

-8

-0

0

-10

-8

-6

-4

-2

0

2

4

6

0

50

100

150

200

250

-3x -2x -1x 2x 3x Other

-10

-8

-6

-4

-2

0

2

4

6

-3x -2x -1x 2x 3x Other

41 4

41

484

2 11 6 0 0 4

152

58 24

266

48 21 3

88

11 4

0

100

200

300

400

500

600

Long Short

-13

0

-1

13

0 1

0 0 0 0

15

-0 -1

0 1

-0 -0

-8

-0 -0

-15

-10

-5

0

5

10

15

20

Long Short

-192

-54

17

218

-45

-10

4

-88

-11 -1

-250

-200

-150

-100

-50

0

50

100

150

200

250

-2

2 0

18

-1

1 0

8

0 0

-5

0

5

10

15

20

18

Global Currencies - Historical View

Net Position and Average Investor Leverage Cumulative Asset Flows into Short / Long ETPs

and Net Position Flows

EU

R-U

SD

E

UR

-GB

P

JP

Y-U

SD

G

BP

-US

D

-1.00x

-0.50x

0.50x

1.00x

1.50x

-300

-200

-100

0

100

200

300

Ave

rage

Inve

sto

r Le

vera

ge

Net

Po

siti

on

($m

)

Net Position, ($m, LHS)

Average Investor Leverage (RHS)

-300

-200

-100

0

100

200

300

400

500

600

700

Net Position Flow ($m)

Asset Flows into Long ETPs ($m)

Asset Flows into Short ETP ($m)

-2.00x

-1.80x

-1.60x

-1.40x

-1.20x

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

-18

-16

-14

-12

-10

-8

-6

-4

-2

0

-4

-2

0

2

4

6

8

10

12

-1.80x

-1.60x

-1.40x

-1.20x

-1.00x

-0.80x

-0.60x

-0.40x

-0.20x

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

-60

-40

-20

0

20

40

60

80

100

120

-1.00x

-0.50x

0.50x

1.00x

1.50x

2.00x

2.50x

3.00x

3.50x

-40

-20

0

20

40

60

80

100

-60

-50

-40

-30

-20

-10

0

10

20

30

40

19

Data, Methodology and Terms Used

This report provides statistics of AUM, flows and related measures for short & leveraged Exchange Traded Products (ETPs).

Following are some definitions for the terms used in the analyses:

ETP (Exchange Trade Product) is used as a generic, interchangeable term to refer to Exchange Traded Funds (ETFs),

Exchange Traded Products (ETPs), Exchange Traded Notes (ETNs) and Exchange Traded Commodities (ETCs).

Short & Leveraged ETPs (S&L ETPs) are ETPs whose leverage factor with respect to the underlying asset class being tracked

is different to 1.

Short ETPs are ETPs whose leverage factor with respect to the underlying asset class being tracked is negative, typically −1𝑥,

−2𝑥 or lower.

Leveraged ETPs are ETPs whose leverage factor with respect to the underlying asset class being tracked is positive and

higher than +1𝑥.

AUM or Assets represents the assets under management in an ETP. For some ETPs for which the AUM is not available, their

market capitalisations have been used where possible.

Asset Flow or Net Subscriptions is a measure representing the value of net subscriptions over the period, thus removing the

effect of changes due to price.

Notional AUM is the sum of the AUM in each ETP multiplied by the absolute value of its leverage factor, e.g. $1 in a 3x long ETP

or $1 in a -3x short ETP is $3 of Notional AUM in both cases.

Notional Flow is the net subscriptions for each ETP multiplied by the absolute value of the leverage factor. Alternatively, it is

the change in the Notional AUM that is not due to price changes.

Net Position is the sum of the AUM in each ETP multiplied by its leverage factor (which may be either negative or positive). A

negative figure indicates investors are net short.

Net Position Flow or Repositioning is Notional Flow in long ETPs minus the Notional Flow in short ETPs. Alternatively, it is

the change in the Net Position that is not due to price changes and indicates whether investors are bullish (net long) or

bearish (net short) after taking leverage factor into account.

Average Investor Leverage is calculated as the average leverage factor across all ETPs of a certain index / exposure and is

weighted by the total AUM and leverage factor for each ETP. Average Investor Leverage is used as a proxy for overall investor

sentiment with regard to an asset. It may be biased due to leverage factors on offer for each index / exposure, and thus the

change in Average Investor Leverage is the most relevant observation rather than the actual number.

All data provided in this report is sourced from calculations by WisdomTree, which are performed on underlying price,

return, AUM, currency and market capitalisation data from Bloomberg®. All data is as of 31 October 2020. All figures are

denominated in USD.

You cannot invest directly in an index. Historical performance is not an indication of future performance and any

investments may go down in value.

Important Information

Communications issued in the European Economic Area (“EEA”): This document has been issued and approved by Wisdom-Tree Ireland Limited, which is authorised and regulated by the Central Bank of Ireland.

Communications issued in jurisdictions outside of the EEA: This document has been issued and approved by WisdomTree UK Limited, which is authorised and regulated by the United Kingdom Financial Conduct Authority.

Interest Policy and Inventory are available on request.

For professional clients only. The information contained in this document is for your general information only and is

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a

This document may contain independent market commentary prepared by WisdomTree based on publicly available informa-tion. Although WisdomTree endeavours to ensure the accuracy of the content in this document, WisdomTree does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this document make no warranties or representation of any kind relating to such data. Where WisdomTree has expressed its own opinions related to

directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this document or its contents.

This document may contain forward looking statements including statements regarding current expectations or beliefs with regards to the performance of certain assets classes and/or sectors. Forward looking statements are subject to certain risks,

materially from those anticipated in such statements. WisdomTree strongly recommends that you do not place undue reliance on these forward-looking statements.

Any historical performance included in this document may be based on back testing. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Howev-er, back tested performance is purely hypothetical and is provided in this document solely for informational purposes. Back test-ed data does not represent actual performance and should not be interpreted as an indication of actual or future performance.

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