ProShares Short FTSE China 50 (YXI)

Overview

The ProShares Short FTSE China 50 (YXI) seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the FTSE China 50 Index. It offers investors a way to profit from a decline in the Chinese stock market as represented by the FTSE China 50 Index.

Reputation and Reliability

ProShares is a well-known issuer specializing in leveraged and inverse ETFs, with a generally good reputation for providing products that track their stated objectives.

Management Expertise

ProShares has a dedicated management team with experience in developing and managing sophisticated ETF products, including leveraged and inverse funds.

Goal

To seek daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the FTSE China 50 Index.

Investment Approach and Strategy

Strategy: This ETF employs a strategy of using financial instruments, such as swap agreements, futures contracts and options contracts, to achieve its inverse exposure to the FTSE China 50 Index.

Composition The ETF's assets primarily consist of derivatives like swap agreements and futures contracts rather than directly holding the stocks of the underlying index.

Market Share: YXI's market share is relatively small compared to broad China ETFs.

Total Net Assets (AUM): 48780000

Key Competitors

• MCHI
• FXI
• GXC
• ASHR

Competitive Landscape

The ETF industry for China equity is dominated by ETFs providing long exposure to the market. YXI differentiates itself by providing inverse exposure, which is less common. Its advantages include the ability to profit from market declines, while disadvantages include higher risk and potential for performance decay in sideways markets.

Historical Performance: Past performance is not indicative of future results and is highly dependent on the performance of the FTSE China 50 Index. Performance will be the inverse of the FTSE China 50, but is affected by fees.

Benchmark Comparison: The ETF's performance should inversely correlate with the FTSE China 50 Index, though compounding and fees will cause deviations over longer periods.

Expense Ratio: 0.95

Average Trading Volume

The average daily trading volume is approximately 35597, indicating moderate liquidity.

Bid-Ask Spread

The typical bid-ask spread can vary but generally ranges from 0.05% to 0.10%, reflecting reasonable trading costs.

Market Environment Factors

Economic indicators in China, global trade relations, and investor sentiment towards Chinese equities heavily influence the fund's performance. Geopolitical risks also play a factor.

Growth Trajectory

The ETF's growth is primarily driven by investor demand for hedging tools and bearish outlooks on Chinese equities, though inverse ETFs are generally used for short-term purposes rather than long term investments.

Competitive Edge

YXI provides a relatively simple and accessible way for U.S. investors to gain inverse exposure to the FTSE China 50 Index. ProShares specializes in leveraged and inverse ETFs, giving them expertise in this niche. It allows investors to efficiently implement short-term bearish strategies on Chinese equities. This targeted focus can be an advantage for those seeking a direct inverse correlation with the index. However, the daily reset mechanism can lead to performance divergence over longer periods.

Volatility

The ETF exhibits high volatility due to its inverse nature and the inherent volatility of the Chinese stock market.

Market Risk

Specific risks include Chinese market risk, currency risk, and the risk associated with using derivatives. Additionally, the daily reset mechanism can lead to significant deviations from the inverse of the underlying index's performance over longer time horizons.

Ideal Investor Profile

YXI is best suited for sophisticated investors with a short-term bearish outlook on Chinese equities who understand the risks and complexities of inverse ETFs.

Market Risk

This ETF is most appropriate for active traders seeking short-term tactical positions rather than long-term buy-and-hold investors.

ProShares Short FTSE China 50 (YXI) provides an inverse exposure to the daily performance of the FTSE China 50 Index using derivatives. It is suitable for sophisticated investors with a short-term bearish outlook on Chinese equities, and for those who understand the risks and complexities of inverse ETFs. Its growth is driven by short-term trading sentiment and hedging strategies. The fund resets daily and it is not designed for long-term holding. Investors should be aware of the potential for performance decay over time.

Data Sources:

• ProShares website
• ETF.com
• Morningstar

Disclaimers:

The information provided is for informational purposes only and does not constitute investment advice. Investing in ETFs involves risk, including the potential loss of principal. Please consult with a financial advisor before making any investment decisions.