ProFunds brings two new exchange-traded funds to market today, the ProShares UltraShort FTSE/Xinhua 25 ETF and the ProShares UltraShort MSCI Japan ETF. Both short stocks in those markets, seeking twice the inverse of the daily movement of the underlying index.
ProShares now manages a total of 58 ETFs, with 35 of them providing short exposure.
“We anticipate strong investor interest in a simple and easy way to get short exposure to the Chinese equity market,” said ProShares Chairman and Chief Executive Officer Michael Sapir. “With the FTSE/Xinhua China 25 Index appreciating by nearly 600% in the last five years, there is a great deal of talk of a potential for a ‘China bubble.’ The new ProShares UltraShort FTSE/Xinhua China 25 ETF can be used by investors to seek to hedge a portfolio with China exposure from losses or to pursue gains from a falling Chinese market.”
The announcement of the new funds came on the same day when the China Daily reported a potential crack in China’s market, with the number of new stock accounts with the Shanghai Stock Exchange falling in September to 3.7 million, down 21% from 4.71 million in August. New mutual fund accounts also declined, by 40%, with investors opening up 1.68 million accounts in September, down from 2.82 million in August.
Total transaction value on the exchange declined 11% between the two months, down from $593 billion in August to $530 billion. Meanwhile, the average price to earnings ratio reached a new high of 63.7, up from 59.17 in August.