ProShares ETF, ProShare ETFs, Pro Shares

By: EconomyWatch   Date: 30 July 2009

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EconomyWatch

The core Content Team our economy, industry, investing and personal finance reference articles.

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ProShares is the fourth largest ETF provider in the US. Like most fund managers, ProShares ETFs offer a simple way to gain exposure to market indexes through exchange traded fund (ETF). However, ProShares’ innovative ways to manage risk and enhance return potential are what distinguishes them from other managers.

 

Pro Shares: History

 

ProShares is a brainchild of the ProFunds Group, the world's largest manager of short and leveraged funds. Founded in December 1997, the ProFunds Group had unveiled ten mutual funds and 17 other funds that were designed to offer investors exposure to sectors and indexes in a manner that substantially leveraged their returns.

 

ProFunds made its mark in the financial market by adapting its investing methodology to the twists and turns of the market. The various types of funds offered by ProFunds aim to achieve any of the three distinctive objectives:

  • Match the daily performance of well-known market indexes

  • Amplify the daily index returns

  • Generate daily returns opposite to that of an index

 

Another distinctive feature of ProFunds that made its funds attractive to traders was the absence of entry, exit or other transaction fees. ProFunds introduced ProShares in 2006, which launched its first wave of leveraged ETFs in June 2006. These ETFs were designed to double the daily performance of the underlying indexes tracked by them.

 

ProShares ETFs are of three types:

  • Short ProShares: The returns from these ETFs are designed to increase when the indexes or benchmarks on which they are based go down. These are best for investors hedging their capital or those seeking profits in a falling market.

  • Ultra ProShares: These ETFs are designed to double the daily performance of the indexes or benchmarks on which they are based. These are best for investors who want to magnify the impact of their investment capital.

  • Alpha ProShares: Through these ETFs, investors can gain access to advanced investment strategies.

 

ProShares ETF

Some of the popular ProShares ETFs are:

  • ProShares UltraShort 20+ Year Treasury:Seeks daily investment results that correspond to twice the inverse daily performance of the Barclays Capital 20+ Year US Treasury Index.

  • ProShares UltraShort S&P500: Aims to realize returns that correspond to twice the inverse of the daily performance of the S&P500Index.

  • ProShares Ultra Financials: Seeks to generate daily returns corresponding to twice the daily performance of the Dow Jones US Financials Index.

 

 


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Most Popular in Exchange Traded Funds

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