NOTIFICATION OF CHANGE OF THE STOCK BORROW RATE AND FUNDING SPREAD OF THE AFFECTED SECURITIES

WisdomTree will amend financing terms for eight 3x daily leveraged and short ETPs effective 1 October 2026. Funding spreads on the four leveraged products tracking the S&P 500, Nasdaq 100, Magnificent 7 and PHLX Semiconductor Index will decline by 24.3bps, from 1.2450% to 1.0020%, while stock-borrow rates on corresponding 3x short products will rise by 24.3bps, from 0.1150% to 0.3580%. The changes modestly improve carry for leveraged long holders but increase borrowing costs for short-product holders.

Analysis

This is economically immaterial for NDAQ and SPGI and only modestly positive for WisdomTree (WT): lower financing drag marginally improves the competitiveness and retention of its European leveraged long ETP range, while higher short-side borrow cost raises the hurdle for tactical bearish users. The annual fee-rate changes are small relative to the products' daily leverage reset and volatility decay, so they should not alter institutional hedging behavior absent a sustained high-volatility regime.

The more useful signal is BNP's willingness to reduce long financing while raising short borrow across equity benchmarks. That asymmetry may reflect swap-book economics or securities-lending availability rather than a directional market view; it is not independently verifiable evidence of dealer bullishness. If it persists, flows could shift at the margin from inverse ETPs toward listed index options, benefiting exchange volume only indirectly and with no near-term earnings consequence.

There is no standalone trade from the notice. Over 1-3 months, monitor published assets under management and secondary-market spreads in 3USL/QQQ3 versus 3USS/QQQS: meaningful net creations in the long products paired with inverse-product redemptions would be a modest supportive data point for WT's European ETP revenue mix. The thesis is falsified if creations remain flat, spreads widen, or volatility rises enough that daily-reset performance dominates the lower stated carry.

Contrarian point: the rate adjustment is more likely a pass-through of BNP's internal funding and stock-loan curve than a forecast on S&P 500, Nasdaq, Magnificent Seven, or semiconductors. Treating it as an equity-risk-on signal would overfit a routine product-maintenance event.

Key Decisions for Investors

• No directional position in NDAQ, SPGI, BNP, or broad equity indices based on this event; expected earnings sensitivity is de minimis and the impact is operational rather than fundamental.
• Place WT on a 1-3 month flow watch: consider a tactical long only if European leveraged-long ETP net creations accelerate materially and WT reports improving ETP net inflows/AUM; use a 7-10% stop and target 15-20% upside, with flow stagnation as the fundamental exit.
• For existing users of European daily leveraged ETPs, reassess carry only for holding periods beyond several weeks; for short-horizon hedges, compare QQQS/SC3S total carrying cost and liquidity against listed NDX/SOX put spreads rather than assuming the ETP remains cheapest.
• Do not infer a BNP equity-beta view. Escalate only if similar borrow-cost increases emerge across multiple issuers and are accompanied by rising securities-lending utilization or index-option skew, which would indicate genuine scarcity of hedge inventory.