ProShares Thursday launched four new exchange-traded funds to trade on the New York Stock Exchange designed to track different indexes and deliver twice the inverse of their retruns, before fees and expenses. The UltraShort Funds aim to provide greater short exposure for investors.
"Over the past few years, we have seen increasing investor interest in more sophisticated strategies to use when the markets are heading down," said Michael Sapir, CEO of ProShare Advisors. "But for those investors who use ETFs, it hasn't necessarily been easy to execute those strategies. Shorting a traditional ETF can involve setting up a margin account, borrowing securities and, potentially, losing more than the original investment."
The four funds are the UltraShort QQQ Proshares, which will track the Nasdaq 100; the UltraShort S&P 500; the UltraShort MidCap 400, which will deliver double the inverse of the correlating S&P Midcap index; and the UltraShort Dow 30, for which the goal will be to double the inverse of the Dow Jones Industial Average.
"Because UltraShort ProShares offer built-in magnified short exposure to an index, investors can 'go short' with a single ETF trade," said Sapir. "Whether the strategy is to capitalize on a trend, or hedge against the risk of a decline, magnified exposure means the investor can commit half the dollars to potentially obtain the desired level of exposure. And, while both gains and losses are magnified, unlike other shorting strategies, the investor can't lose more than the original investment."
With these four new funds, the Bethesda, Md.-based company now offers 12 ETFs.