ProShares announced today that it would remove four of its ETFs from the Bats Exchange Competitive Liquidity Providers (CLP) Program after market close on Sept. 30, 2016. The funds will be moving to the Bats Lead Market Maker (LMM) Program on Oct. 3, 2016.
The four ETFs moving from the Bats CLP program to the Bats LMM program are:
- Global Listed Private Equity ETF (PEX)
- Merger ETF (MRGR)
- CDS Short North American HY Credit ETF (WYDE)
- Short Term USD Emerging Markets Bond ETF (EMSH)
The Bats CLP Program is designed to encourage quoting activity for Bats-listed securities. The payment of a CLP fee is intended to generate more quotes and trading than might otherwise exist. Under the LMM program, the funds will have an exclusive lead market maker.
ProShares is removing these funds from the CLP program because it expects they will be able to maintain trading liquidity in the LMM program. Leaving the CLP program may have positive or negative effects on the price and liquidity of the funds, which could affect investors’ purchases and sales.
Learn more about ProShares’ participation in the Bats CLP program.
ProShares helps investors to go beyond the limitations of conventional investing and face today's market challenges. ProShares strives to help investors build better portfolios by providing access to a wide variety of investment exposures and strategies delivered with the liquidity, transparency and cost effectiveness of ETFs. Our wide array of ETFs can help you reduce volatility, manage risk and enhance returns.
Investing involves risk, including the possible loss of principal. ProShares ETFs are generally non-diversified and each entails certain risks, including imperfect benchmark correlation and market price variance, that can increase volatility and decrease performance. Short positions in a security lose value as that security's price increases. Narrowly focused investments typically exhibit higher volatility. Investments in smaller companies typically exhibit higher volatility. Smaller company stocks also may trade at greater spreads or lower trading volumes, and may be less liquid than stocks of larger companies. International investments may also involve risk from unfavorable fluctuations in currency values, differences in generally accepted accounting principles, and from economic or political instability. In emerging markets, many risks are heightened, and lower trading volumes may occur. Bonds will decrease in value as interest rates rise. High yield bonds may involve greater levels of credit, liquidity and valuation risk than for higher-rated instruments. A decline in the value of a country's currency could adversely affect the ability of an issuer to pay principal and interest on a bond. Investments in the debt of sub-sovereigns (including agency-issued securities) and quasi-sovereigns (that have significant government ownership) may or may not be issued by or guaranteed as to principal and interest by a governmental authority. 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.
WYDE is actively managed and there is no guarantee investments selected and strategies employed will achieve the intended results. Active management may also increase transaction costs. Risks related to credit default swaps ("CDS") may include lack of an active market and difficulty in valuation. Because this ETF is exposed to high yield credit, there may be greater levels of credit, liquidity and valuation risk than for higher rated instruments. Investors should actively manage and monitor their investments. This ETF may not be suitable for all investors.
MRGR targets the same mergers, acquisitions or other corporate reorganizations ("deals") as the S&P Merger Arbitrage Index (the "index") and is exposed to similar risks. There is no assurance that any targeted deal will be completed, and most or all of the deals could fail under certain market conditions. If a targeted deal fails, spreads in that deal should be expected to widen, typically resulting in losses well in excess of the spread the index and fund were attempting to capture. In addition, deals may be terminated, renegotiated, or subject to a longer time frame than initially contemplated. The index may also delete transactions, thus precluding potential future gains. These events may negatively impact the performance of the index and fund. Foreign companies involved in targeted deals may present risks distinct from comparable transactions completed solely within the United States.
There are risks in investing in listed private equity companies (LPEs), which encompass business development companies (BDCs) and other financial institutions or vehicles whose principal business is to invest in and provide financing to privately held companies. Little public information may exist for private or thinly traded companies, and investors may not be able to make fully informed investment decisions. Private equity securities carry risks related to unclear ownership, market access and market opaqueness. BDCs are subject to the Investment Company Act of 1940 but are exempt from many of its regulatory constraints. The fund is subject to risks faced by BDCs to the same extent as its index is so concentrated. A significant portion of the index is composed of BDCs or other investment companies. The fund may not acquire greater than 3% of the total outstanding shares of such companies. As a result, the fund’s ability to purchase certain securities in the proportions represented in the index could be inhibited. The fund may be required to use sampling techniques in these circumstances, which could increase correlation risk. For more on the fund, LPEs, BDCs, correlation and other risks, please read the prospectus.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing.
ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds' advisor.
Hewes Communications Inc.
Tucker Hewes, 212.207.9451