ProShares' New ETFs Let Investors Short the Global Market

ProShares' family of leveraged, short and leveraged-short ETFs have been one of the biggest success stories of the past year. The funds, which promise to deliver 200%, -100% and -200% of the return of their benchmark indexes, respectively, have racked up over $9 billion in assets in just 16 months on the market. But they're about to get much bigger.

The company moved into the international arena today with the launch of Short (EFZ) and UltraShort (EFU) ETFs tied to the MSCI EAFE Index. That index, of course, is the same one tracked by the $50 billion iShares MSCI EAFE ETF (EFA), the second-largest ETF in the world.

"We are very optimistic about how these ETFs will be received," said Michael Sapir, CEO of ProShare Advisors LLC. "Investors have been flooding into international ETFs for the last few years, and those markets have produced good returns. But there are going to be investors who think those markets might turn around, or who want to hedge exposure, and we will offer them that ability."

The EFA funds are just a start; ProShares will launch funds tied to the MSCI Emerging Markets Index in early November, and will launch UltraShort (-200%) ETFs tied to China and Japan soon after. Each is huge markets in the ETF space.

"You are seeing more and more portfolios being created with some short exposure," said Sapir. "We are the fastest-growing ETF company this year, which suggests that investors are more and more accepting of the concept that having some leverage and/or short exposure in their portfolio makes sense."

With these products effectively opening up half of the world's market capitalization, ProShares' asset count could jump quickly ... soon.

In related new, ProShares has filed papers with the SEC to launch 48 new leveraged, short and inverse-leveraged ETFs covering the commodity and currency markets. For complete coverage, click here.

Written by Matthew Hougan

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