ProShares has been one of this summer’s busiest ETF providers. The company has introduced 10 more ETFs built to deliver daily magnified returns.
Four of the latest ProShares ETFs are leveraged funds designed to increase in value when stocks fall in Europe, the Pacific ex-Japan region, Brazil and Mexico. Four other ETFs are designed for investors bullish on international and emerging market stocks.
While most ProShares ETFs attempt to give one or two times daily leveraged results, two new funds will attempt triple leverage.
The ProShares UltraPro S&P 500 (UPRO) aims for 300 percent performance of the S&P 500 for a single day, while ProShares UltraPro Short S&P 500 (SPXU) seeks 300 percent of the daily inverse performance of that same index (before fees and expenses).
Here’s a quick summary of the new ProShares ETFs along with their ticker symbols:
• ProShares UltraShort MSCI Europe (EPV)
• ProShares UltraShort MSCI Pacific ex-Japan (JPX)
• ProShares UltraShort MSCI Brazil (BZQ)
• ProShares UltaShort MSCI Mexico (SMK)
• ProShares Ultra MSCI EAFE (EFO)
• ProShares Ultra MSCI Emerging Markets (EET)
• ProShares Ultra FTSE/Xinhua China 25 (XPP)
• ProShares Ultra MSCI Japan (EZJ)
• ProShares UltraPro S&P500 (UPRO)
• ProShares UltraPro Short S&P500 (SPXU)
“ProShares now offers a large selection of 14 ETFs that offer short or leveraged exposure to a variety of regions and countries,” says Michael L. Sapir, ProFunds Group Chairman and CEO. “With this broad line-up, investors can make tactical shifts as conditions change in markets around the world.”
According to the prospectus, the funds listed above will charge annual expenses of 0.95 percent.
Self-regulatory bodies like FINRA have called for greater oversight on leveraged and inverse performing ETFs.
In a June notice, FINRA stated: “Training about leveraged and inverse ETFs should emphasize the need to understand and consider the risks associated with such products, including the investor’s time horizons, and the impact of time and volatility on the fund’s performance.”
Certain ETF providers have already moved to increase product disclosures and other safety nets.
Direxion Shares recently changed the name of its entire lineup of leveraged and short ETFs to reflect the word “Daily.” This move was done to help investors clearly understand that Direxion Shares attempt to deliver daily leveraged and inverse returns of their underlying indexes.
The first series of leveraged and short ETFs in the U.S. market were originally introduced in mid-2006.
Including the newly launched ETFs, ProShare Advisors now manages 86 ETFs with combined assets of around $27 billion. The firm also manages 115 leveraged and short mutual funds known as ProFunds.
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Ron DeLegge is the San Diego-based publisher and editor of ETFguide.com and the radio host of the “Index Investing Show,” which is broadcast nationally on Saturday afternoons and can be heard online at www.indexshow.com. Ron served as an investment and financial advisor for 11 years.