ProShares Expands Foreign Leverage With New ETFs

June 04, 2009

New ProShares ETFs aim to provide 200% leverage to four key international markets.


If you think international markets are on the verge of a new legup in the ongoing broad global rally, a few more tools via exchange-tradedfunds are now available to provide more leverage.

ProShares launched on Wednesday four ETFs taking 200% positions infour popular foreign indexes. Two are broad in geographic reach and each addsto existing ProShares ETFs that take inverse positions with the samebenchmarks.

The new ProShares are the:

  • ProShares Ultra MSCI EAFE (NYSE Arca: EFO)
  • ProShares Ultra MSCI Emerging Markets (NYSE Arca: EET)
  • ProShares Ultra FTSE/Xinhua China 25 (NYSE Arca: XPP)
  • ProShares Ultra MSCI Japan (NYSE Arca: EZJ)

These ETFs each seek tocapture 2 times the daily performance of their underlying benchmarks. That'ssomething to consider since rival Direxion recently moved to introduce a seriesof leveraged ETFs that track monthly index performances. (See related articlehere.)

In theory, being able to track a longerreturn period should make the new Direxion ETFs better-suited for longerinvesting periods. That assumes, of course, investors hold the proposed ETFs atthe beginning—rather than later—in any given month.

Two of the proposedDirexion leveraged ETFs tracking monthly performance would follow the sameindexes as the new EFO and EET.

But leverage on a monthly performancebasis has yet to come out. In the meantime, ProShares clearly has first-moverstatus in the international inverse ETF marketplace. Rydex still doesn't haveany ETFs that leverage foreign markets. Direxion has two such funds, the Daily DevelopedMarkets Bull 3x Shares ETF (NYSE: DZK) and the Daily Emerging Markets Bull 3xShares ETF (NYSE: EDC). As their names imply, each ETF aims at 300% of the dailyreturns of their respective MSCI benchmarks.

The other ways to useleverage now available overseas is all through ProShares ETFs at the moment. Butstay tuned ...


Find your next ETF

Reset All