From the press release:
Bethesda, MD, November 7, 2007—ProFunds Group, the largest provider of short and magnified exposure indexed funds¹, announced today that two new Short International ProShares—the first ETFs designed to go up when the Chinese and Japanese markets fall—are set to launch November 8. The $9 billion ProShares family will now include 58 ETFs providing short and magnified exposure to popular market indexes.
The two ETFs provide investors with a convenient way to hedge gains or to seek profit from downturns in the Chinese and Japanese markets. With the addition of four other Short International ProShares over the last few weeks, the line-up of ProShares providing short exposure will number 35.
"We anticipate strong investor interest in a simple and easy way to get short exposure to the Chinese equity market," said ProShares Chairman and CEO 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."
Even as Chinese equities have risen in recent years, they have shown significant volatility. For instance, in late February 2007, the index dropped by 9% in a single day on fears that the Chinese government was moving to crush speculation in stocks. So, even those investors who still believe in China’s long-term prospects may be interested in hedging against short-term volatility or seeking profit during dips.
UltraShort ProShares offer many advantages over shorting baskets of stocks, individual stocks or ETFs. Investors can achieve short exposure without opening a margin account—buying short exposure is as convenient and simple as purchasing an individual stock. In addition, investors can lose only the amount that they invest, whereas when they short stocks, stock baskets or ETFs, their losses are theoretically unlimited. Moreover, these ETFs can be employed in vehicles that do not permit margin accounts—IRAs, for instance—and can easily be tracked throughout the day. And finally, because each fund’s objective is twice the inverse of the underlying index, investors can get twice the exposure for their investment dollars, or pursue a specific level of exposure for half the cash....
| ProShares | Daily Objective* | Ticker Symbol |
|---|---|---|
| UltraShort FTSE/Xinhua China 25 | Daily returns equal to two times the inverse of the daily return of the FTSE/Xinhua China 25 Index | FXP |
| UltraShort MSCI Japan | Daily returns equal to two times the inverse of the daily return of the MSCI Japan Index | EWV |
