ProShares UltraShort MSCI Brazil Capped (BZQ)

Overview

ProShares UltraShort MSCI Brazil Capped seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the MSCI Brazil 25/50 Index. It is designed for investors seeking to profit from a decline in the Brazilian equity market.

Reputation and Reliability

ProShares is a well-known issuer of leveraged and inverse ETFs. They have a proven track record of delivering the stated investment objectives, although these types of ETFs are inherently risky.

Management Expertise

ProShares has a specialized team focused on managing leveraged and inverse ETFs, which requires expertise in derivatives and market timing.

Goal

To achieve daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the MSCI Brazil 25/50 Index.

Investment Approach and Strategy

Strategy: This ETF employs a leveraged inverse strategy, utilizing derivatives to achieve its -2x daily target. It's important to understand that due to the effects of compounding, holding periods exceeding one day can lead to substantially different results than the target.

Composition The ETF primarily holds derivatives, such as swap agreements, futures contracts, and other financial instruments, designed to provide inverse leverage to the MSCI Brazil 25/50 Index.

Market Share: Relatively small as it's a niche product.

Total Net Assets (AUM): 10950000

Key Competitors

• EWZ
• BRZU
• BZQ

Competitive Landscape

The ETF industry is highly competitive. BZQ offers broad exposure to Brazilian Equities, and EWZ is the iShares MSCI Brazil ETF, which has greater AUM and liquidity, while BRZU offers similar leveraged exposure but positive.

Historical Performance: Historical performance can be volatile and heavily influenced by the Brazilian equity market. Due to the leveraged and inverse nature, long-term performance is unlikely to correlate directly with the underlying index.

Benchmark Comparison: The ETF aims to provide -2x the *daily* performance of the MSCI Brazil 25/50 Index. Performance should be compared daily; deviations are expected over longer periods.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume varies, but generally, it has reasonable liquidity for its size. Trading volume is about 11,000.

Bid-Ask Spread

The bid-ask spread can be wider than more liquid ETFs, reflecting the risk and complexity of the underlying holdings.

Market Environment Factors

Economic factors in Brazil, global commodity prices, political stability, and currency fluctuations significantly affect the ETF's performance.

Growth Trajectory

Growth trajectory is dependent on market sentiment towards Brazil. Changes to strategy or holdings are regularly made to ensure the investment objectives are met.

Competitive Edge

BZQ provides a more specialized investment strategy that offers a high leverage ratio, focusing solely on Brazilian stocks while mitigating market fluctuations. This appeals to investors looking to increase their return potential, but they should know that it is riskier, and this fund is best to use for short-term trades, or investors could risk losing a lot of their money.

Volatility

The ETF is highly volatile due to its leveraged and inverse nature. Investors should be prepared for significant price swings.

Market Risk

Significant market risk exists due to the ETF's focus on a single country and the use of leverage. Changes in Brazilian equity values will be amplified.

Ideal Investor Profile

Sophisticated investors with a high-risk tolerance and a short-term investment horizon who understand the complexities of leveraged and inverse ETFs.

Market Risk

Primarily suitable for active traders seeking to profit from short-term declines in the Brazilian equity market. Not suitable for long-term, buy-and-hold investors.

ProShares UltraShort MSCI Brazil Capped is a leveraged inverse ETF designed to profit from short-term declines in the Brazilian equity market. It is highly volatile and suitable only for sophisticated investors with a high-risk tolerance and short-term focus. The ETF seeks to provide -2x the daily performance of the MSCI Brazil 25/50 Index, but long-term results can deviate significantly due to compounding. The ETF primarily utilizes derivatives and carries significant market and volatility risk, and it is important that investors fully understand the potential risks before investing.

Data Sources:

• ProShares.com
• ETF.com
• Yahoo Finance

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investing in ETFs involves risk, including the potential loss of principal. Leveraged and inverse ETFs are not suitable for all investors.