ProShares, a premier provider of ETFs, announced today the launch of ProShares Equities for Rising Rates ETF (EQRR), the first U.S. equity ETF specifically designed to outperform traditional large-cap indexes, such as the S&P 500, in a rising interest rate environment. The fund is benchmarked to the Nasdaq U.S. Large Cap Equities for Rising Rates Index and is listed on the Nasdaq exchange.
“EQRR is for investors who expect rising interest rates and want to outperform traditional large-cap indexes as rates go up,” said Michael L. Sapir, co-founder and CEO of ProShare Advisors, LLC, the advisor to ProShares. “EQRR takes those sectors most positively correlated with interest rates, then within those sectors invests in the companies that have tended to outperform during periods of rising rates."
The fund seeks to track the performance of the Nasdaq U.S. Large Cap Equities for Rising Rates Index. The index methodology starts with the 500 largest listed U.S. stocks and selects the five U.S. large-cap sectors that have most recently demonstrated the highest correlation to weekly changes in 10-year U.S. Treasury yields. It then identifies the top 10 stocks in each sector that have the highest correlation of relative performance—versus 500 of the largest listed U.S. stocks—to changes in the 10-Year yield. Stocks in sectors with a higher correlation to rising rates have a heavier weighting in the index. This process is repeated quarterly to maintain a portfolio of 50 stocks. The resulting portfolio aims to provide relative outperformance compared to traditional large-cap indexes during periods of rising U.S. Treasury interest rates.
ProShares has been at the forefront of the ETF revolution since 2006. ProShares now offers one of the largest lineups of ETFs, with more than $27 billion in assets. The company is the leader in strategies such as dividend growth, alternative and geared (leveraged and inverse). ProShares continues to innovate with products that provide strategic and tactical opportunities for investors to manage risk and enhance returns.
July 25, 2017
ProShares is the leader in dividend growth, alternative and geared (leveraged and inverse) strategies, source: ProShares, Strategic Insight and Lipper, based on number of funds and/or assets , as of December 31, 2016.
Investing involves risk, including the possible loss of principal. The fund is designed to provide relative outperformance, as compared to traditional U.S. large-cap indexes, such as the S&P 500, during periods of rising U.S. Treasury interest rates. As a result, the fund may be more susceptible to underperformance in a falling rate environment. There can be no guarantee that the fund will provide positive returns or outperform other indexes. The fund concentrates its investments in certain sectors. Narrowly focused investments typically exhibit higher volatility. Please see summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will achieve its investment objective.
The fund’s shares may trade at a premium or discount to their net asset value in the secondary market. Trading fund shares in the secondary market will incur transaction costs.
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. Obtain them from your financial advisor or broker-dealer representative or visit ProShares.com.
Nasdaq® is a registered trademark of NASDAQ, Inc. and is licensed for use by ProShare Advisors LLC. ProShares ETFs have not been passed on by NASDAQ, Inc. or its affiliates as to their legality or suitability. ProShares ETFs based on the Nasdaq U.S. Large Cap Equities for Rising Rates Index are not issued, sponsored, endorsed, sold, or promoted by NASDAQ, Inc. or its affiliates, and they make no representation regarding the advisability of investing in ProShares ETFs. 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.