ProShares, a US-based provider of leveraged and inverse ETFs, has announced the launch of the ProShares UltraPro Financials ETF (FINU) and the ProShares UltraPro Short Financials ETF (FINZ). The ETFs have been listed on the NYSE Arca.
The triple-leveraged ProShares UltraPro Financials ETF seeks to provide 3x the daily performance of the Dow Jones US Financials Index, while the triple-leveraged ProShares UltraPro Short Financials ETF seeks to provide 3x the inverse daily performance of the same index.
The Dow Jones US Financials Index measures the performance of the US-listed financial services industry.
Component companies include regional banks; major US-domiciled international banks; full line, life, and property and casualty insurance companies; companies that invest, directly or indirectly in real estate; diversified financial companies such as Fannie Mae, credit card issuers, cheque cashing companies, mortgage lenders and investment advisors; securities brokers and dealers including investment banks, merchant banks and online brokers; and publicly traded stock exchanges.
The index’s top five holdings are JP Morgan with a weight of 7.36%, Wells Fargo with 7.17%, Citigroup with 4.46%, Bank of America with 4.07% and Berkshire Hathaway with 3.34%.
“Financials have been one of the most dynamic parts of the market and many investors are seeking to manage risk or potentially take advantage of moves by the sector,” said Michael L. Sapir, Chairman and CEO of ProShare Advisors, the investment advisor to ProShares.
“Our existing geared financial ETFs have raised more than $1 billion of assets and we are pleased to offer additional ways for investors to manage their exposure to this important market segment,” added Sapir.
With assets of nearly $22 billion, ProShares is the largest issuer of leveraged and inverse ETFs and the introduction of FINU and FINZ expands the company’s lineup of geared financial ETFs to five.
FINU and FINZ will compete directly with the Direxion Daily Financial Bull 3x Shares ETF (FAS) and the Direxion Daily Financial Bear 3x Shares ETF (FAZ), a pair of NYSE Arca-listed triple-leveraged long and short ETFs offered by Direxion, which provide broadly similar exposure.
FAS and FAZ are based on the Russell 1000 Financial Services Index, a subset of the Russell 1000 Financial Services Index that measures the performance of the securities classified in the financial services sector of the large-cap US equity market.
Both the ProShares and Direxion pairs of ETFs currently come with expense ratios of 0.95%.