ProFunds Launches Slew of International UltraShort ETFs

by: IndexUniverse

On the heels of its move into international leveraged waters, ProShares Thursday doubled its lineup of exchange-traded funds providing -200% overseas exposure.

The four new ETFs launching this morning on the NYSE Arca exchange are the:

  • ProShares UltraShort MSCI Europe (NYSEARCA:EPV)
  • ProShares UltraShort MSCI Pacific ex-Japan (NYSEARCA:JPX)
  • ProShares UltraShort MSCI Brazil (NYSEARCA:BZQ)
  • ProShares UltraShort MSCI Mexico Investable Market (NYSEARCA:SMK)

Each will follow their corresponding indexes, taking 2X short positions in their respective benchmarks. They’ll expand the number of UltraShort ETFs that ProShares has on the market tracking MSCI indexes to a total of eight. The other previous launches cover developed international markets through the broad EAFE index, emerging markets as a whole, Japan and China.

Earlier this month, ProShares launched the first of its 200% leveraged international ETF series with four similar funds. (See related article here.)

The new ETFs will each charge an expense ratio of 0.95%. A breakdown of the individual indexes shows the following:

  • For EPV, the United Kingdom dominated with about 32% of the underlying constituents as of the end of the first quarter. France was next at 16% followed by Switzerland (13%) and Germany (12%). The rest were in single digits. The underlying benchmark had 489 different companies listed.
  • With 146 constituent names, JPX’s benchmark was dominated by BHP Billiton (NYSE:BHP) (10.69%). Trailing next were Westpac Banking (NYSE:WBK) (5.32%) and Commonwealth Bank (OTC:CWBS) (5.10%). The index is dominated by financials, weighted at around 45%. Materials was the second-biggest sector at 17%.
  • The benchmark holdings for BZQ are dominated by different share classes of Petrobras (NYSE:PBR), which combined, represented more than 11% of the ETF’s constituent holdings. The same situation occurs with Vale Do Rio Doce (NYSE:VALE), which together leaves about a 6.60% weighting to the company. The leading sectors are: energy (31%), materials (25%) and financials (20%). The index had about 69 different names.
  • An even slimmer SMK had a list of about 50 stocks which was heavily weighted to America Movil (NYSE:AMX) at more than 31%. Wal-Mart Mexico (OTCQX:WMMVY) was next at 8.21%. In terms of sectors, the ETF was led by telecom (43%), consumer staples (21%) and consumer discretionary (13%).

An interesting side note for investors, ProShares’ Web site only provides data of the underlying indexes. Besides the prospectus for each, that’s the most recent detailed information available. And the benchmark data is only through March 31. Daily holdings are listed in totals of swaps held in the underlying index and cash.

Original post