ProShares Launches the First 10 Year Breakeven Inflation ETFs
Posted on February 09, 2012 at 08:30 AM EST
ProShares, the nation’s fourth most successful exchange traded fund (ETF) company,1 today announced the launch of ProShares UltraPro 10 Year TIPS/TSY Spread (NYSE: UINF) and ProShares UltraPro Short 10 Year TIPS/TSY Spread (NYSE: SINF), the first ETFs linked to 10 year breakeven inflation. Breakeven inflation (BEI) is a widely followed measure of inflation expectations.2
UINF seeks to provide 3x the daily performance of the Dow Jones Credit Suisse 10-Year Inflation Breakeven Index, before fees and expenses. SINF seeks to provide -3x the daily performance of the Dow Jones Credit Suisse 10-Year Inflation Breakeven Index, before fees and expenses. The ETFs list on NYSE Arca today.
"Many investors carefully watch 10 year breakeven inflation but have not had access to a liquid and transparent way to act on their views,"said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares' investment advisor. "Now, for the first time, investors can try to take advantage of swings in 10 year inflation expectations with an ETF.”
Historically the volatility of 10 year BEI has been relatively low. Magnifying the daily movements of 10 year BEI by 3x or -3x over the past five years results in annualized volatility roughly comparable to that of the S&P 500.3
The launch of UINF and SINF follows ProShares’ launch last month of RINF and FINF, the first 30 year BEI ETFs.
About Breakeven Inflation and UINF’s and SINF’s Benchmark
Breakeven inflation aims to isolate the market’s expectation of inflation implied by the difference in yields between Treasury Inflation Protected Securities (TIPS) and Treasury bonds. The Dow Jones Credit Suisse 10-Year Inflation Breakeven Index tracks the returns of a long position in 10-year TIPS and a short position in Treasury bonds.4,5
ProShares is the country’s fourth most successful exchange traded fund (ETF) company,1 with 131 funds and nearly $23 billion in assets.6 ProShares’ lineup includes the largest family of geared (leveraged and inverse) ETFs.7 ProShare Advisors and ProShare Capital Management are affiliated with ProFund Advisors, which was founded in 1997. Together, they manage more than $26 billion in ETF and mutual fund assets.6
1 Source: Financial Research Corporation, based on analysis of organic net sales of U.S. exchange traded products (as of 6/30/2011). Includes products launched by their current management company; excludes products acquired through purchase or merger.
2 The spread difference in yield between Treasuries and TIPS (Treasury yield minus TIPS yield) is commonly referred to as “breakeven inflation” (BEI) or the “breakeven inflation rate” and is considered to be one measure of the market’s expectation for inflation over a defined period of time.
3 As measured by the Barclays Capital 10 year breakeven inflation index and S&P 500 from 12/31/06 to 12/31/11. For this period, the annualized volatility of daily returns of 3x or -3x the Barclays Capital 10 year breakeven inflation index was 20.8% compared to 26.6% for the S&P 500.
4 Treasury bonds with the closest maturity to the 10-year TIPS.
5 The index is designed to be a measure of the market’s annualized inflation expectations in the United States over the next 10 years.
6 Assets as of 12/31/2011.
7 Source: Lipper, based on a worldwide analysis of all known providers of funds in these categories. The analysis covered ETFs and ETNs by the number of funds and assets (as of 6/30/2011).
UINF and SINF seek returns that are 3x or -3x the return of an index or other benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings consistent with their strategies, as frequently as daily.
Unlike many traditional bond funds, UINF and SINF are not designed to provide steady income. The level of the index (and these funds) will fluctuate based on changes in the price of the underlying bonds, not their yields. The returns of these funds will be more directly linked to percentage changes in the index than percentage changes in breakeven inflation (“BEI”). The index is not designed to measure the realized rate of inflation, nor does it seek to replicate the returns of any index or measure of actual consumer price levels. Additional factors besides inflation expectations, such as liquidity and risk premiums, can materially affect BEI levels. The index is a measure of 10 year “on-the-run” BEI.
Investing involves risk, including the possible loss of principal. These Funds are non-diversified and entail certain risks, including risk associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, and market price variance, all of which can increase volatility and decrease performance. Short ProShares should lose money when their benchmarks or indexes rise. 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 adviser or broker/dealer representative or by visiting proshares.com. There is no guarantee any ProShares ETF will achieve its investment objective.
The “Dow Jones Credit Suisse 10-Year Inflation Breakeven Index” and the “Dow Jones Credit Suisse 30-Year Inflation Breakeven Index” are joint products of Dow Jones Indexes, the marketing name and a licensed trademark of CME Group Index Services LLC ("CME Indexes"), and Credit Suisse Securities (USA) LLC (“Credit Suisse”). "Dow Jones®" "DJ," "Dow Jones Indexes," "Credit Suisse," "Dow Jones Credit Suisse 10-Year Inflation Breakeven Index," and “Dow Jones Credit Suisse 30-Year Inflation Breakeven Index” are service marks of Dow Jones Trademark Holdings, LLC ("Dow Jones") or Credit Suisse, as the case may be, have been licensed to CME Indexes and sublicensed to ProShares. ProShares have not been passed on by these entities as to their legality or suitability. ProShares based on the Dow Jones Credit Suisse 10-Year Inflation Breakeven Index or the Dow Jones Credit Suisse 30-Year Inflation Breakeven Index are not sponsored, endorsed, sold or promoted by Dow Jones, Credit Suisse, CME Indexes or any of their affiliates. Dow Jones, Credit Suisse, CME Indexes and their affiliates 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 funds' advisor.
Hewes Communications, Inc.
Tucker Hewes, 212-207-9451
PROSHRS ULTRPRO QQQ PROSHS ULTRA NQ BIO ProShares 30 Year TIPS/TSY Spread ETF ProShares German Sovereign/Sub-Sovereign ETF ProShares Large Cap Core Plus ProShares RAFI Long/Short ProShares Short 20+ Year Treasury ProShares Short 30 Year TIPS/TSY ETF ProShares Short Basic Materials ProShares Short Dow30 ProShares Short FTSE China 25 ProShares Short Financials ProShares Short High Yield ProShares Short Investment Grade Corp. ProShares Short MSCI EAFE ProShares Short MSCI Emerging Markets ProShares Short MidCap400 ProShares Short Oil & Gas ProShares Short QQQ ProShares Short Real Estate ProShares Short Russell2000 ProShares Short S&P500 ProShares Short SmallCap600 ProShares Short VIX Short Term Futures ETF ProShares Ultra 20+ Year Treasury ProShares Ultra 7-10 Year Treasury ProShares Ultra Basic Materials ProShares Ultra Consumer Goods ProShares Ultra Consumer Services ProShares Ultra DJ-UBS Commodity ProShares Ultra DJ-UBS Crude Oil ProShares Ultra Dow30 ProShares Ultra Euro ProShares Ultra Europe ProShares Ultra FTSE China 25 ProShares Ultra Financials ProShares Ultra Gold ProShares Ultra Health Care ProShares Ultra High Yield ProShares Ultra Industrials ProShares Ultra Investment Grade Corp. ProShares Ultra MSCI EAFE ProShares Ultra MSCI Emerging Markets ProShares Ultra MSCI Japan ProShares Ultra MSCI Mexico Ca ProShares Ultra MSCI Pacific ex-Japan ProShares Ultra MidCap400 ProShares Ultra Oil & Gas ProShares Ultra QQQ ProShares Ultra Real Estate ProShares Ultra Russell 3000 ProShares Ultra Russell MidCap Growth ProShares Ultra Russell MidCap Value ProShares Ultra Russell1000 Growth ProShares Ultra Russell1000 Value ProShares Ultra Russell2000 ProShares Ultra Russell2000 Growth ProShares Ultra Russell2000 Value ProShares Ultra S&P500 ProShares Ultra Semiconductors ProShares Ultra Silver ProShares Ultra SmallCap600 ProShares Ultra Technology ProShares Ultra Telecommunications ProShares Ultra Utilities ProShares Ultra Yen ProShares UltraPro 10 Year TIPS TSY Spread ETF ProShares UltraPro Dow30 ProShares UltraPro MidCap400 ProShares UltraPro Russell2000 ProShares UltraPro S&P 500 ProShares UltraPro Short 10 Year TIPS TSY Spread ProShares UltraShort DJ UBS Natural Gas ETF ProShares UltraShort DJ-UBS Commodity ProShares UltraShort DJ-UBS Crude Oil ProShares UltraShort Euro ProShares UltraShort FTSE China 25 ProShares UltraShort Financials ProShares UltraShort Industrials ProShares UltraShort Lehman 7-10 Year Treasury ProShares UltraShort MSCI EAFE ProShares UltraShort MSCI Emerging Markets ProShares UltraShort MSCI Europe ProShares UltraShort MSCI Japan ProShares UltraShort MSCI Mexico Investable Market ProShares UltraShort MSCI Pacific ex-Japan ProShares UltraShort MidCap400 ProShares UltraShort Oil & Gas ProShares UltraShort QQQ ProShares UltraShort Real Estate ProShares UltraShort Russell MidCap Growth ProShares UltraShort Russell MidCap Value ProShares UltraShort Russell1000 Value ProShares UltraShort Russell2000 ProShares UltraShort Russell2000 Growth ProShares UltraShort Russell2000 Value ProShares UltraShort Semiconductors ProShares UltraShort SmallCap600 ProShares UltraShort TIPS ETF ProShares UltraShort Technology ProShares UltraShort Telecommunications ProShares UltraShort Utilities ProShares UltraShort Yen ProShares VIX Mid-Term Futures ETF ProShares VIX Short-Term Futures ETF Proshares Short KBW Region Banking ETF Proshares Ultra KBW Region Banking ETF
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Press Release Service provided by PRConnect.
Stock quotes supplied by Telekurs USA
Postage Rates Bots go here