ProShares To Roll Out More ‘Geared’ ETFs

March 01, 2010

ProShares, the world’s largest purveyor of leveraged and inverse ETFs, is preparing a launch of seven funds targeting international markets and the
regional banking sector that will raise its number of specialty ETFs to almost 100.

The four international funds now in registration with the Securities and Exchange Commission are designed to deliver twice the daily return of their underlying benchmarks. The funds include the Ultra MSCI Brazil, the Ultra MSCI Pacific ex-Japan, the Ultra MSCI Europe and the Ultra MSCI Mexico Investable Market. Their inverse counterparts, the ProShares UltraShort international funds BZQ, SMK, JPX and EPV, launched in June 2009 and are already active on the NYSE.

The three regional banking funds include the Ultra KBW Regional Banking ETF, which seeks to double daily returns of its index; and the UltraShort KBW Regional Banking fund, which is geared to double the daily performance of the index’s inverse. The Short KBW Regional Banking ETF is designed to match the daily inverse of the index’s performance.

The new ETFs will join a ProShares lineup of 92 inverse and leveraged ETFs, the largest one of which is the ProShares UltraShort 20+ Year Treasury ETF (NYSEArca: TBT). That’s the single largest leveraged and inverse fund, with $4.5 billion in assets as of Jan. 31. Leveraged and inverse funds are designed for more hands-on, risk-tolerant investors, as long-term returns can vary widely from daily objectives.

The international offerings are linked to a family of MSCI indexes, which are free-float-adjusted, market-capitalization-weighted benchmarks that measure the performance of local equity markets by focusing on mid- and large-cap names.

The funds will invest mainly in a representative sampling of equities, and will also use derivatives and short-term money market instruments to gain leverage.

The Ultra MSCI Pacific ex-Japan ETF will invest in Australia, Hong Kong, New Zealand and
. The Ultra MSCI Europe fund comprises 16 developed nations.

The banking sector funds will tap into regional banks and thrifts listed on
stock exchanges.

Expense ratios for all international funds and the long banking strategy are 0.95 percent. The company didn’t disclose any of the new trading symbols, or the fees for its short funds.


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