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DUBLIN - WisdomTree Multi Asset Issuer Public Limited Company has announced changes to the daily swap fee and funding spread for its leveraged S&P 500 exchange-traded product. The adjustments will take effect from February 1, 2025, and involve a reduction in the daily swap rate, accompanied by an increase in the funding spread.
The affected financial instrument, known as WISDOMTREE S&P 500 3X DAILY LEVERAGED (ISIN: IE00B7Y34M31), will see its daily swap rate decrease from 0.00233% to 0.00136%. This rate is part of the costs investors incur for the leverage provided by the swap provider, BNP Paribas (OTC:BNPQY), as per the terms of their agreement.
Concurrently, the funding spread, which is the cost of borrowing to maintain leveraged positions, will be adjusted from 0.50% to 1.10% per annum. The funding spread is a key factor in the overall cost of holding leveraged exchange-traded products.
These amendments come as a result of an agreement between the issuer, the swap provider, and the trustee, manager, and issuer of the affected securities. They have collectively entered into an amendment to the supplemental trust deed for each class of affected securities to enact these changes.
The move to alter the fee structure of this leveraged product is in accordance with the conditions outlined in the issuer’s base prospectus, dated September 5, 2024, and conforms to the stipulated terms of the swap provider agreement.
Investors in these leveraged exchange-traded products typically seek to amplify their exposure to the daily performance of the S&P 500 index. The changes in fees will directly impact the cost of holding these investment products.
The information regarding these changes is based on a press release statement from the issuer. It is important for investors to note that while the daily swap rate has been reduced, the increase in the funding spread could affect the total cost of the product over time.
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