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Portfolio > ETFs

ProShares to Launch 4 Leveraged ETFs: Portfolio Products

By Emily Zulz

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ProShares will launch four new leveraged exchange traded funds benchmarked to the S&P Communication Services Select Sector Index and trading on the NYSE Arca/

The Ultra Communication Services Select Sector ETF (XCOM) will correspond to 2x the daily performance of the index, whereas the new UltraPro Communication Services Select Sector ETF (UCOM) will correspond to 3x the daily performance of the index.

(Related: A Massive Shift in Stock Sector Classifications Starts Today)

The Ultra Short Communication Services Select Sector ETF (YCOM) will correspond to -2x the daily performance of the index and the new UltraPro Short Communication Services Select Sector ETF (SCOM) corresponds to -3x the daily performance of the index.

“ProShares is committed to providing knowledgeable investors with a comprehensive set of tools for tactical investing,” said Ben Fulton, managing director of ProShares’ tactical products business, in a statement. “To that end, we are particularly excited about adding leveraged and inverse communication services ETFs to our sector suite.”

The S&P Communication Services Select Sector Index covers the new communication services sector, which focuses on the evolution of communication, entertainment and information sharing. It  includes certain FAANG stocks, media giants and telecom leaders.

S&P Dow Jones Indices Launches Global SmallCap Select Index Series

S&P Dow Jones Indices launched the S&P Global SmallCap Select Index Series, which seeks to mitigate risks in global small-caps by excluding companies without a consistent track-record of positive earnings.

The Index Series currently includes the following regional indices: S&P Global SmallCap Select, S&P Global ex-U.S. SmallCap Select, S&P Developed ex-U.S. SmallCap Select, S&P Emerging SmallCap Select, and S&P/ASX Small Ordinaries Select.

Each index is weighted by float market capitalization and is a subset of the small-cap segment of the S&P Global BMI (Broad Market Index), except for the S&P/ASX Small Ordinaries Select which is built from the S&P/ASX Small Ordinaries. In order to be eligible for inclusion, companies must post two consecutive years of positive earnings per share.

With the exception of the S&P/ASX Small Ordinaries Select, the regional indices are based on methodology that excludes the smallest and least liquid 20% of companies within each country by their float market caps and median daily values traded in order to improve the replicability of the indices. The new indices are rebalanced semi-annually.

First Trust Launches New Active ETF

First Trust Advisors launched a new actively managed exchange-traded fund called the First Trust Low Duration Strategic Focus ETF (Nasdaq: LDSF).

The fund seeks to generate current income, with a secondary objective of preservation of capital. It allocates assets primarily among First Trust ETFs but may also include other ETFs representing various asset classes and aims to provide over time diversification and less interest rate sensitivity than traditional core fixed income benchmarks.

The fund is managed by First Trust Advisors, with selection and portfolio decisions made by an investment committee that combines bottom-up fundamental credit analysis with disciplined portfolio construction. The committee manages both interest rate risk and credit risk and targets a duration of three years or less.

Its process begins with a robust, top-down review of macroeconomic factors including monetary and fiscal policies, growth forecasts, trade and tax policies, global market views and current market valuations. Then it uses disciplined bottom-up asset level analysis including views on rates, duration, credit, currency and current asset valuations.

The relative attractiveness of the various fixed income asset classes are evaluated to best position the fund to take advantage of market trends and investment opportunities. T

Fitch Ratings Launches ESG Relevance Scores

Fitch Ratings launched a new integrated scoring system that shows how environmental, social and governance factors impact individual credit rating decisions for all asset classes..

The new ESG Relevance Scores, produced by Fitch’s analytical teams, displays both the relevance and materiality of ESG elements to the rating decision and uses a standardized, transparent scoring system. The scores are sector-based and entity-specific and will be available initially for more than 1,500 non-financial corporate ratings.

That will be followed with ratings for banks, non-bank financial institutions, insurance, sovereigns, public finance, global infrastructure and structured finance.

The scores do not make value judgements on whether an entity engages in good or bad ESG practices, but draw out which E, S, and G risk elements are influencing the credit rating decision.

— Read the last portfolio product roundup on ThinkAdvisor here: Natixis Launches Mirova International Sustainable Fund: Portfolio Products

Emily Zulz

@think_emilyz

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