What are Proshares ETFs? Types of Proshares ETFs. All you need to know
Louis Mayberg and Michael Sapir, both former Rydex workers, created ProFunds Group in 1997 with $100,000. It also introduced bear market inverse mutual funds that year.
ProFunds Group introduced ProShares, its first inverse exchange-traded fund, in 2006. The business created an exchange-traded fund that invests in Bitcoin futures contracts in October 2021.
ProShares created several ETF product strategies which are available to investors.
With more than $60 billion in assets, ProShares currently has one of the most extensive ETF line-ups. Dividend growth, interest rate hedged bonds, and geared (leveraged and inverse) ETF investing are all areas where the company excels.
ProShares continues to develop new solutions that give investors strategic and tactical options for increasing returns and managing risk.
The company also offers several Proshares ETFs, classified as
- Equity ETFs
- Non-equity ETFs.
What are Equity ETFs and Non-equity ETFs?
- Equity ETFs consist of dividend growers, thematic, rising rates, ex-sector and factors.
- Non-equity ETFs have bitcoin-linked, interest rate hedged, alternative and volatility.
ProShares is one of the few firms to provide geared ETFs, i.e., leveraged and inverse ETFs.
ETFs are of two categories: equity and non-equity
- Equity ETFs are of types such as broad market, sector, international and thematic investing.
- Non-equity ETFs are ones like fixed income, commodity and currency ETFs.
Proshares ETFs strategies are of seven types
- Explore Dividend Growth
- Thematic Opportunities
- Eliminate an S&P 500 Sector
- Gain Exposure to Bitcoin Returns
- Hedge Against Rising Rates
- Leveraged & Inverse Strategies
- Opportunities in Market Volatility.
Let’s elaborate on them one by one.
Explore dividend growth strategy
Aims to capture dividend rich stocks as underlying assets. The hallmarks of the quality of a firm are evaluated by stable earnings, fundamentals and a strong history of profit and growth.
The indicators of consistent dividend growth are company health, strong management and durability and staying power.
The ETF follows several dividend-aristocrats indices like the S&P 500® Dividend Aristocrats Index, Russell 2000 dividend growers ETF, MSCI EAFE, MSCI EM, etc.
ProShares Thematic ETFs
give investors access to firms at the forefront of trends that reshape our economy and reinvent our future.
These include online retail, pet care, transformational changes, big data, nanotechnology, innovative materials, etc.
The Proshares ex-sector ETFs allow investors to eliminate specific sectors that the firm thinks will underperform from the underlying index; the S&P 500 ex-energy ETFs excludes oil, gas and fuel sectors from the S&P 500. S&P 500 Ex-Financials ETF excludes banks, diversified financials, consumer finance, asset management, investment banking and brokerage companies, insurance companies and REITs.
S&P 500 Ex-Health Care ETF
Excludes pharmaceuticals, biotechnology and life sciences tools and services companies, health care providers, equipment and services companies.
S&P 500 Ex-Technology ETF
Excludes information technology companies, including software and technology hardware and equipment, and semiconductor companies.
ProShares Bitcoin Strategy ETF (BITO)
It is a novel U.S-designed ETF to provide investors with an easy way to add bitcoin exposure to portfolios.
The ETF provides investors with a one-stop solution by eliminating the need to maintain separate accounts and wallets to manage bitcoin investments. It is regulated, unlike crypto and is available all day to trade.
ProShares Investment Grade
Interest Rate Hedged (IGHG) and ProShares High Yield—Interest Rate Hedged (HYHG) are corporate bond ETFs with an interest rate hedge built-in that aims for a duration of zero, effectively eliminating interest rate risk.
Since 2006, ProShares’ line-up of ETFs has helped investors use leverage to increase their buying power and inverse strategies to profit during or protect a portfolio from declines.
Increase exposure to enhance profits and inversely do the same in the opposite direction, thus, providing a hedge against a company or a sector.
UltraPro QQQ leverage is some leveraged ETFs
- Short QQQ,
- Ultra-short QQQ
- Triple inverse leveraged ETFs.
Volatility ETFs are for experienced investors who want to profit from losses in the predicted volatility of the S&P500, as defined by the pricing of VIX futures contracts, while also lowering their risk in their U.S. stock portfolio.
Some volatility ETFs are VIX Short Term Futures ETF, VIX Mid-term futures ETF, VIX Ultra short futures ETF and Short VIX short term futures ETF.
Thus, ProShares is a market leader in providing various types of ETFs.