ETF Database » SRS

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

Michael Johnston — Sat, 13 Mar 2010 20:23:35 +0000

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 [...]

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ETFs To Play Along With Allstate

Michael Johnston — Wed, 25 Nov 2009 07:00:39 +0000

Allstate Corp., the largest publicly-traded insurer of homes and automobiles in the U.S., announced this week that it is making some major shifts in its investment portfolio that now exceeds $100 billion. The Northbrook, Illinois-based company announced that it is reducing its exposure to commercial real estate and municipal bonds in favor of corporate debt. After a disappointing performance in 2008, corporate bonds have delivered stellar returns in the six months, yielding 13% in the second quarter and more than 9% in the third quarter according to Merrill Lynch. Corporate bonds lost almost 11% in 2008. Allstate is tilting its debt holdings towards investment grade securities, avoiding the temptations of junk bonds with yields to maturity approaching 10%. “There is probably more of a quality bias to our buying,” Mark Cloghessy, managing director of Allstate’s portfolio management group, told Bloomberg. “We are looking at the investment-grade side of the market, [...]

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The Definitive Guide To Real Estate ETFs: Real Estate ETF Investing 101

Michael Johnston — Wed, 25 Nov 2009 06:05:06 +0000

Once considered a vital “return enhancer” in almost every portfolio, real estate as an asset class has fallen out of favor with investors following its spectacular collapse during (and role in causing) the recent global economic downturn. Real estate was historically embraced because of its potential for delivering excess returns in bull property markets and low correlation with traditional stock and bond investments. But as default rates skyrocketed, values plummeted, and correlations went to 1.0, asset managers have sold off real property and reallocated investor portfolios to equities and fixed income. Despite its fall from grace, real estate is beginning to creep back into portfolios, as investors regain their appetite for risky assets (we include a small allocation to real estate in several of our All-ETF Model Portfolios). Real estate ETFs have seen cash inflows of more than $3 billion year-to-date, reflecting perhaps a preference for achieving diversified exposure within [...]

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The Definitive Inverse ETF Guide: Short/Bear ETFs 101

Andy H — Thu, 05 Nov 2009 23:00:20 +0000

As the stock market continues to rise, seemingly running ahead of fundamentals, more and more investors are becoming concerned that the stocks are becoming overvalued, and that a downward correction may be just around the corner. While safe haven investments such as the U.S. dollar and gold are popular picks for investors looking to profit from a decline in asset prices, the inverse correlation between these investments and equities is far from perfect. A growing number of investors are beginning to utilize inverse ETFs to accomplish a wide range of investment goals, ranging from establishing hedges in their portfolios to speculating on a pullback in prices. If used correctly, these products can be very powerful, but they can be complex and come with a number of risks that should be carefully considered. Taking a short position in certain asset classes is, of course, noting new. Investors have been utilizing short [...]

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Leveraged ETF Fallout Continues

Michael Johnston — Fri, 31 Jul 2009 13:37:55 +0000

What started last week in St. Louis has set off a domino effect throughout the country. Following the announcement of Edward Jones’ decision to cease offering leveraged ETFs, a number of other firms have distanced themselves from these controversial products: Ameriprise Financial has suspended the sale of leveraged ETFs. LPL Financial has banned the sale of ETFs using more than 200% leverage (Direxion offers a full line of products targeting 300% exposure to benchmark indexes and ProShares recently expanded into this space as well). UBS announced its decision to stop soliciting the sale of leveraged and inverse funds this week, noting that the short term nature of the products is inconsistent with their long-term view of investing. According to Bloomberg, Morgan Stanley and Wells Fargo announced that they are putting leveraged products under review, a step that more likely than not will lead to their suspension. Over the last year, [...]

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Edward Jones Discontinues Sale Of Leveraged ETFs

Michael Johnston — Wed, 22 Jul 2009 14:38:26 +0000

The swelling controversy over the risks associated with leveraged ETFs has apparently caused its first casualty. St. Louis-based Edward Jones & Co., the prominent financial services firm, decided during a regular review of its products in June to stop selling leveraged funds, citing the fact that they are “one of the most misunderstood and potentially dangerous types of ETFs,” according to mutual fund research analyst Katie Martin. Edward Jones prepared a report titled “Not All ETFs Are Created Equal” that highlights the potential pitfalls with these complex financial instruments. “Investors also need to recognize that leveraged ETFs have an increased potential for capital gains distributions and significantly higher expense ratios than the traditionally broadly based stock market ETFs, negating some of the benefits of purchasing an ETF,” the report said. Edward Jones’ decision to drop the product line comes as calls for regulation of leveraged ETFs are reaching a fever pitch. [...]

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ETF Database » SRS

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

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