ProShares Short MSCI Emerging Markets (EUM)

Overview

ProShares Short MSCI Emerging Markets (EUM) seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the MSCI Emerging Markets Index. It provides a way to potentially profit from declines in emerging market equities or to hedge existing emerging market equity exposure. It is not a buy-and-hold investment and is designed for short-term trading.

Reputation and Reliability

ProShares is a well-known issuer specializing in geared and inverse ETFs, with a long track record in the market.

Management Expertise

ProShares has a dedicated team with expertise in managing complex ETF structures and derivative instruments.

Goal

To deliver daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the MSCI Emerging Markets Index.

Investment Approach and Strategy

Strategy: The ETF employs a strategy of using financial instruments, primarily swap agreements, to achieve its inverse investment objective.

Composition The ETF primarily holds swap agreements and other derivative instruments designed to provide inverse exposure to the MSCI Emerging Markets Index.

Market Share: EUM has a smaller market share compared to broader emerging market ETFs or leveraged emerging market products due to its inverse strategy and specific use case.

Total Net Assets (AUM): 73700000

Key Competitors

• Direxion Daily Emerging Markets Bear 3X Shares (EDZ)
• ProShares UltraShort MSCI Emerging Markets (EEV)
• iShares MSCI Emerging Markets ETF (EEM)

Competitive Landscape

The competitive landscape includes other inverse and leveraged emerging market ETFs. EUM's advantage lies in its specific focus on providing a -1x daily inverse return, while competitors may offer -2x or -3x leverage. The disadvantages are related to tracking errors of index.

Historical Performance: Historical performance varies depending on the performance of the MSCI Emerging Markets Index. When the index declines, EUM is expected to increase in value.

Benchmark Comparison: The ETF's performance should be compared to the inverse of the MSCI Emerging Markets Index. Deviations may occur due to fees, expenses, and tracking errors.

Expense Ratio: 0.95

Average Trading Volume

The ETF's average trading volume is moderate, providing sufficient liquidity for typical trading activities.

Bid-Ask Spread

The bid-ask spread can vary depending on market conditions but is typically moderate, representing the cost of trading the ETF.

Market Environment Factors

Emerging market economic conditions, geopolitical events, currency fluctuations, and global trade dynamics all affect EUM.

Growth Trajectory

The ETF's growth trajectory depends on investor demand for hedging or speculating on declines in emerging market equities; strategy and holdings are maintained to provide the inverse return.

Competitive Edge

EUM provides a straightforward and accessible way to gain inverse exposure to emerging markets. Its primary advantage lies in its simplicity. It offers a direct way for investors to hedge against potential losses in emerging market investments, or to bet against the asset class, without having to navigate complex derivative strategies themselves. Its established track record with the reputable ProShares, which specializes in inverse and leveraged products, provides added credibility in the market.

Volatility

The ETF's volatility is high due to its inverse and leveraged nature, making it unsuitable for long-term buy-and-hold investors.

Market Risk

EUM is subject to market risk associated with emerging market equities and the potential for tracking errors due to its use of derivatives.

Ideal Investor Profile

The ideal investor is one who understands leveraged and inverse ETFs, actively monitors their investments, and seeks short-term trading opportunities.

Market Risk

EUM is best suited for active traders and those seeking to hedge short-term exposure to emerging market equities, not for long-term investors.

ProShares Short MSCI Emerging Markets (EUM) provides inverse exposure to the MSCI Emerging Markets Index, making it suitable for short-term hedging or speculative purposes. It employs derivatives to achieve its objective. Due to its leveraged nature, it carries a high level of risk. The ETF is more appropriate for sophisticated investors that understand the risks involved with leveraged and inverse ETF's. EUM provides the daily return based on the inverse of emerging market indices.

Data Sources:

• ProShares website
• ETF.com
• Yahoo Finance

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investors should consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results.