ProShares, a premier provider of alternative exchange traded funds, today announced the launch of ProShares Managed Futures Strategy (NYSE Arca:FUTS). FUTS follows the S&P Strategic Futures Index, which is designed to capitalize on upward and downward trends in the futures markets.
“With their low correlation to both stocks and bonds, managed futures strategies can be a smart choice for investors looking to enhance the risk-adjusted returns of a traditional portfolio,” said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC. “By offering access to alternatives like managed futures with the liquidity, transparency and cost effectiveness of ETFs, we’re helping investors build better portfolios.”
Managed futures strategies identify price trends in the futures markets and take long or short positions across asset classes such as commodities, currencies and fixed income. This flexibility means they can potentially capture value from both upward and downward price movements in these markets. Managed futures portfolios have historically provided risk-adjusted returns comparable to those of stocks with low correlation to the stock and bond markets.1
About the Index
The S&P Strategic Futures Index is a rules-based index currently composed of 24 equally risk-weighted futures contracts in 16 commodity and eight financial markets. Positions are either long or short based on their price trends over the prior seven months.
ProShares offers the nation’s largest lineup of alternative ETFs. We help investors to go beyond the limitations of conventional investing and face today’s market challenges. ProShares helps investors build better portfolios by providing access to alternative investments delivered with the liquidity, transparency and cost effectiveness of ETFs. Our lineup of over 145 alternative ETFs can help you reduce volatility, manage risk and enhance returns.
1According to data sourced from Bloomberg, for the nearly 15-year period ending 8/31/2014, the correlation of stock and bond returns to managed futures returns was -0.09 for stocks and 0.23 for bonds. Risk-adjusted returns as measured by the Sharpe ratio were 0.17 for stocks, 1.04 for bonds and 0.27 for managed futures. Stocks are represented by S&P 500, bonds by the Barclays U.S. Aggregate Bond Index and managed futures by the Credit Suisse Managed Futures Hedge Fund Index (inception 10/31/1999).
This ETF participates in the NYSE Arca ETP Incentive Program (go to https://www.nyse.com/products/etp-incentive-program) and ProShares pays a fee for each ETF participating in the program. Payment of an ETP Incentive Fee is intended to generate more quotes and trading than might otherwise exist absent this payment. Participation in the NYSE Arca ETP Incentive Program may have potential impacts on the price and liquidity of the security. In particular, there could be adverse impacts on a purchaser's sale of an ETF that leaves the program. Learn more (go to http://qa1.proshares.com/resources/liquidity_programs.html).
ProShares has the largest lineup of alternative ETFs in the United States according to Strategic Insight, based on analysis of all the known alternative ETF providers (as defined by Strategic Insight) by their number of funds and assets (as of 1/31/2014).
This fund is not an investment company regulated under the Investment Company Act of 1940 and is not afforded its protections. Please read the prospectus carefully before investing.
Investing involves risk, including the possible loss of principal. Investing in ETFs involves a substantial risk of loss. ProShares ETFs are generally non-diversified and each entails certain risks, including risk associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. There are additional risks related to commodity investments due to large institutional purchases or sales, and natural and technological factors such as severe weather, unusual climate change, and development and depletions of alternative resources. Please see their summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will achieve its investment objective.
This ETF may take short positions in futures contracts. Short positions lose value as security prices increase, which may potentially expose the ETF to unlimited losses resulting in a total loss of investment. The ETF’s index is designed to capture potential economic benefits derived from both rising and declining trends in futures prices. In order to accomplish this, the index positions are rebalanced and repositioned, either long or short, on a monthly basis. Long positions or short positions in each futures contract are determined based on price movements over the past seven months. In volatile markets, contracts may frequently be repositioned from long to short, and vice versa. If the price movements that caused a particular contract to be repositioned subsequently reverse themselves, the index will be negatively impacted. Such activity in its index can cause the ETF to lose possibly significantly more than an investment focused on only long or short positions in the same futures contracts. This fund generates a K-1 tax form.
ProShares Trust II is a commodity pool as defined in the Commodity Exchange Act and the applicable regulations of the CFTC. ProShare Capital Management LLC is the Trust Sponsor and commodity pool operator (CPO). The Sponsor is registered as a CPO with the CFTC, and is a member of the NFA. Neither this ETF nor ProShares Trust II is an investment company regulated under the Investment Company Act of 1940 and neither is afforded its protections.
This information must be accompanied or preceded by a current ProShares Trust II prospectus. ProShares Trust II (issuer) has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC website at sec.gov. Alternatively, the issuer will arrange to send you the prospectus if you request it by calling toll-free 866.776.5125, or visit ProShares.com (http://www.proshares.com/funds/trust_ii_prospectuses.html).
The "S&P Strategic Futures Index" is a product of S&P Dow Jones Indices LLC and its affiliates and has been licensed for use by ProShares. "S&P®" is a registered trademark of Standard & Poor's Financial Services LLC ("S&P") and "Dow Jones®" is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones") and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates. ProShares have not been passed on by S&P Dow Jones Indices LLC and its affiliates as to their legality or suitability. ProShares based on the S&P Strategic Futures Index are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and they make no representation regarding the advisability of investing in ProShares. THESE ENTITIES AND THEIR AFFILIATES MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES.
ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the fund’s advisor or sponsor.
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