ProShares has introduced two new exchange-traded for investors seeking short exposure without the magnification of leverage, Short Oil & Gas ProShares and Short Financials ProShares.
With oil prices near records and the financial sector under pressure from by sub-prime troubles and the threat of recession, ProShares says, many investors have been looking for ways to benefit from – or protect against – volatility in these sectors.
According to the firm, this investor interest has been demonstrated by the rapid growth of two ProShares ETFs offering short leveraged exposure to these sectors. UltraShort Oil & Gas ProShares has attracted USD2.3bn in net inflows so far this year and UltraShort Financials ProShares has attracted USD1bn.
The two new ProShares ETFs are designed to rise in value when indices covering their respective sectors go down, and vice versa. The firm now manages 26 sector ETFs including three each offering short, ultrashort (200 per cent inverse leveraged) and ultralong (200 per cent leveraged) exposure to the oil and gas and financials sectors.
The two ProShares funds offering leveraged short exposure to these sectors have been among the firm’s most popular ETFs. UltraShort Oil & Gas ProShares has traded more than 44 million shares in a day, while UltraShort Financials has traded 22 million shares. Both funds have more than USD2bn in assets.
According to ProShares, it is the fifth-largest US ETF provider and enjoyed the largest net inflows of any US ETF manager over the first four months of this year. The new funds, which will trade on the American Stock Exchange, bring the firm’s total number of ETFs to 64.
ProShares is part of the USD26bn ProFunds Group, which also includes more than 115 mutual funds. Its range includes short and leveraged mutual funds that track stock market indices in addition to its exchange-traded offerings.