ProShares Registers Two Treasuries-Linked Funds

October 15, 2009

 

ProShares Trust is adding two new Treasuries-linked funds to its lineup of offerings.

The funds—the ProShares Ultra 7-10 Year Treasury, and the ProShares Ultra 20+ Year Treasury—will seek to capture 200 percent of the daily performance of their underlying indexes.

ProShares already offers two short funds tied to a 20-year Treasuries index from Barclays Capital—the ProShares Short 20+ Year Treasury (NYSEArca: TBF), and the ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT). These funds provide -100 percent exposure and -200 percent exposure, respectively, to the underlying index.

The firm's other fund, the ProShares UltraShort 7-10 Year Treasury (NYSEArca: PST), offers  -200 percent exposure.

Another player in that space is Direxion, which offers 300 percent leveraged and -300 percent inverse ETFs covering 10-year Treasuries and 20-year Treasuries.

However, funds in the latest ProShares filing with the Securities and Exchange Commission would be the first 200 percent leverage funds to cover the Treasuries area. Although they have under-performed other asset classes this year, Treasuries gained a lot of attention last year as one of the few safe havens during the market crunch.

As with any geared product, keep in mind that the compounding phenomenon means you won’t necessarily be getting twice the long-term performance of the index—just twice the daily performance, which often turns out to have very different results.

Total net annual operating expenses for both funds were pegged at 0.95 percent.

You can read the prospectus here.

 

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