Leverage Shares revises strategy for LSE series with gold long and broader short exposure

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Leverage Shares LSE strategy update

Highlights

Leverage Shares will shift its LSE series investment strategy from a long position in QQQ to gold and expand short exposure beyond VIX to include natural gas and crude oil effective 2 November 2026.
The strategy will target long gold exposure using SPDR Gold Trust, Invesco Physical Gold ETC, WisdomTree Physical Swiss Gold ETC, or gold futures, with short exposures ranging 20%-40% each in VIX, natural gas, and crude oil.
Portfolio administrators gain discretion to adjust individual short exposures between 0%-100% per asset class based on contango conditions, aiming to improve risk profile and product diversification.

Strategy changes take effect in November

As reported by London Stock Exchange, Leverage Shares plc has given notice that it is amending the investment strategy of the relevant series and renaming both the strategy and the series to reflect those changes.

The current strategy, described as Short Volatility Long Tech, seeks to hold a long position in the Invesco QQQ Trust, Series 1 while profiting from contango in the volatility curve through a short volatility exposure. Under the revised approach, the long position moves to gold, while the short exposure can be taken across one or more of the VIX Index, natural gas and crude oil.

Leverage Shares says the basic structure and economic rationale remain unchanged. Issue proceeds are still invested in a single core long position, with the portfolio administrator maintaining short positions in instruments whose underlying futures curves are frequently in contango, while short sale proceeds are held as cash in the margin account.

The gold exposure can be implemented through the SPDR Gold Trust, the Invesco Physical Gold ETC, the WisdomTree Physical Swiss Gold ETC or gold futures listed on a futures exchange. The portfolio administrator aims to invest 100% of series issue proceeds in that gold exposure, or to hold a 100% notional long position when futures are used.

Risk profile and product scope broaden

The short side of the strategy also changes materially. Instead of a 15% short volatility position through VIX-linked exchange traded products, the series may now take short exposure to any one or more of three asset classes, the VIX Index, natural gas and crude oil, with a long-term target short exposure of between 20% and 40% to each asset class.

The portfolio administrator has discretion to vary the short exposure to each asset class within a range of 0% to 100%. It may also cut an asset class exposure to 0% if it determines that the relevant futures curve is not, or is not expected to be, in contango.

Leverage Shares says the amendments are intended to improve the strategy's risk profile by diversifying the sources of contango, expanding the instruments available for building VIX short exposure, including leveraged ETFs, and offering a different risk profile from the previous equity-linked structure by replacing QQQ with gold. The investment strategy amendments and naming modifications are effective from 2 November 2026.

In our earlier report on the Philippine Social Security System (SSS), we covered how the state pension fund defended its equity portfolio after attention on unrealized losses, stressing that paper drawdowns are not cash losses unless positions are sold below cost. The fund highlighted decades of realized gains and recurring dividend income, and said it relies on a long-term, diversified approach with ongoing risk oversight to manage volatility and protect member contributions.

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