This ETF seeks a return that is either 300%, 200%, -100%, -200% or -300% of the return of an index or other benchmark (target) for a single day. Due to the compounding of daily returns, ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. Investors should monitor their ProShares holdings consistent with their strategies, as frequently as daily. For more on correlation, leverage and other risks, please read the prospectus.
In the 3X leveraged market, Direxion continues to roll out new products, most recently (DRN), the 3X Daily Real Estate Bull Fund and (DRV), the 3X Daily Real Estate Bear Fund.
Also, in spite of all the recent negative press surrounding leveraged ETFs, the providers of these continue offering new vehicles for investors. And finally, this year’s hot action in emerging markets appears to have spawned a whole new series of ETFs specializing in various single country exposures to the developing regions.
This is no surprise since, in my view, ETFs offer nearly unlimited flexibility and the opportunity to gain exposure to markets that retail investors have traditionally not been able to access.
Of particular note in the list above is (TBF) the ProShares Short 20 Year Bond Fund. This is the first ETF that I know of that offers a non leveraged short exposure to the bond market, a valuable supplement to (TBT), the widely traded ProShares Ultra Short 20 Year Bond Fund. TBF is still thinly traded as it's so new, but I would expect over time that this ETF would offer excellent opportunities to investors and traders who want to "short" the Treasury Bond market.
Another interesting new entry is (VNM) the Market Vectors Viet Nam ETF, which offers exposure to a new emerging market that has also previously been unavailable to investors. Introduced on August 14th, it already is trading more than 70,000 shares per day and so promises to be a popular emerging market ETF along the lines of (EWZ) the iShares Brazil Index or (FXI) the iShares FTSE China Index.
These single country emerging market ETFS can be extraordinarily volatile and require a disciplined plan to trade successfully, but the potential rewards are well documented with the emerging markets sector having been one of the hottest performers to date in 2008.
As a student and practictioner of sector rotation, I'm excited about these new funds and the potential diversification and exposure to a wide variety of asset classes they offer. Retail investors and traders have never had a broader selection of choices and opportunities, and even in today's difficult markets, I think we can expect to see a steady stream of new ETFs coming our way.