ProShares Files For More Leveraged ETFs: China, Biotech, Real Estate, Materials

by on March 13, 2010 | ETFs Mentioned:

ProShares, the largest issuer of leveraged and inverse ETFs, has filed for SEC approval on several additional products. The proposed funds include:

  • Short FTSE/Xinhua China 25 (YXI): This ETF would seek to deliver daily investment results equal to the inverse of the daily change in the FTSE/Xinhua China 25 Index. This index consists of 25 mega-cap Chinese equities, and is the basis for the largest U.S.-listed China ETF (FXI). ProShares already offers 200% and -200% ETFs based on the FTSE/Xinhua China 25 Index (XPP and FXP, respectively).
  • Ultra Nasdaq Biotechnology: This ETF would seek daily investment returns equal to 200% of the daily return on the Nasdaq Biotechnology Index, a benchmark tracked by the iShares Nasdaq Biotechnology Index Fund (IBB).
  • UltraShort Nasdaq Biotechnology: This ETF would be linked to the same index, seeking to deliver daily returns equal to -200% of the daily change in the index.
  • Short Basic Materials (SBM): This ETF would seek to deliver daily returns equal to the inverse of the Dow Jones U.S. Basic Materials Index, a benchmark covered by the iShares Dow Jones U.S. Basic Materials Index Fund (IYM). ProShares currently offers 200% and -200% leveraged ETFs (UYM and SMN, respectively).
  • Short Real Estate (REK): This proposed ETF would be designed to deliver daily returns equal to the inverse of the daily return on the Dow Jones U.S. Real Estate Index. ProShares Ultra Real Estate (URE) and UltraShort Real Estate (SRS) both offer leveraged exposure to this index, and the iShares Dow Jones U.S. Real Estate Index Fund (IYR) offers simple 1x exposure.

Leveraged ETF Boom

Already this year, ProShares and Direxion have launched several new products, many of which have seen heavy initial trading volumes. In January, ProShares launched a pair of 200% leveraged Treasury ETFs. The company launched eight more ETFs last month, including funds offering 300% and -300% daily exposure to the Nasdaq 100, Dow Jones Industrial Average, S&P MidCap 400, and Russell 2000.

Direxion has also expanded its product lineup significantly this year, launching the first ETFs offering leveraged exposure to short-term Treasuries in February. Earlier this week, trading began on six new leveraged ETFs from Direxion, including the company’s first 2x and -2x funds. In total, nearly 20 new leveraged ETFs have hit the market already this year.

Disclosure: No positions at time of writing.