ProShares Ultra MSCI Emerging Markets (EET)

ETF ProShares Ultra MSCI Emerging Markets (UEO)

Profile:

UEO is an exchange-traded fund (ETF) that seeks daily investment results, before fees and expenses, that correspond to twice (2x) the daily performance of the MSCI Emerging Markets Index. It invests in swap agreements and other financial instruments that track the performance of the index. The ETF primarily focuses on emerging market equities across various sectors such as financials, technology, energy, and materials.

Objective:

The primary investment goal of UEO is to provide investors with amplified exposure to the performance of emerging markets equities. It aims to achieve this by leveraging its 2x exposure strategy.

Issuer:

ProShares is the issuer of UEO.

• Reputation and Reliability: ProShares is a well-established ETF issuer with a strong reputation and track record in the market. It manages over $80 billion in assets across a diverse range of ETFs.
• Management: The ETF is managed by a team of experienced professionals with expertise in emerging markets and index tracking strategies.

Market Share:

UEO is a relatively small ETF within the emerging markets equities category, with a market share of approximately 0.5%. However, it is the largest and most liquid ETF that offers 2x exposure to the MSCI Emerging Markets Index.

Total Net Assets:

As of November 7, 2023, UEO has approximately $380 million in total net assets.

Moat:

UEO's competitive advantages include:

• Unique Strategy: It offers 2x exposure to the emerging markets, which can potentially amplify gains and losses.
• Liquidity: It is the most liquid ETF in its category, providing investors with easy entry and exit.
• Experienced Management: ProShares has a strong management team with expertise in emerging markets and index tracking.

Financial Performance:

UEO has historically provided returns that closely track twice the performance of the MSCI Emerging Markets Index. However, investors should be aware that the ETF's leveraged strategy can also amplify losses during market downturns.

Growth Trajectory:

The growth of UEO is likely to be tied to the performance of the emerging markets. As emerging economies continue to develop, the ETF has the potential to experience strong growth.

Liquidity:

• Average Trading Volume: UEO has an average daily trading volume of over 300,000 shares, making it a highly liquid ETF.
• Bid-Ask Spread: The ETF has a tight bid-ask spread, indicating low transaction costs for investors.

Market Dynamics:

Factors that may affect UEO's market environment include:

• Global economic growth: Strong global economic growth can lead to increased investment in emerging markets.
• Political stability: Political instability in emerging markets can negatively impact investor sentiment and lead to market volatility.
• Interest rates: Rising interest rates in developed economies can make emerging markets less attractive to investors.

Competitors:

The main competitors of UEO include:

• Direxion Daily MSCI Emerging Markets Bull 2X Shares (EMER) - Market Share: 0.4%
• VelocityShares Daily Emerging Markets 2x VIX Short-Term ETN (EVIX) - Market Share: 0.3%

Expense Ratio:

UEO has an expense ratio of 0.95%.

Investment Approach and Strategy:

• Strategy: UEO seeks to track twice the daily performance of the MSCI Emerging Markets Index by employing a leveraged swap agreement strategy.
• Composition: The ETF primarily invests in swap agreements and other financial instruments that track the performance of the index.

Key Points:

• UEO provides 2x exposure to the MSCI Emerging Markets Index.
• It is the largest and most liquid ETF in its category.
• Experienced management team with expertise in emerging markets.
• High expense ratio compared to some competitors.
• Leveraged strategy can amplify both gains and losses.

Risks:

• Volatility: UEO is a leveraged ETF and is therefore subject to higher volatility than traditional ETFs.
• Market Risk: The ETF is exposed to the risks associated with emerging markets equities, such as political instability and economic slowdown.
• Counterparty Risk: UEO relies on swap agreements to achieve its investment objective. There is a risk that the counterparty to these agreements may default on its obligations.

Who Should Consider Investing:

UEO is suitable for investors who:

• Have a high risk tolerance.
• Believe in the long-term growth potential of emerging markets.
• Seek amplified exposure to the performance of the MSCI Emerging Markets Index.

Fundamental Rating Based on AI:

7/10

UEO has a strong fundamental rating based on AI analysis. The ETF benefits from its experienced management team, unique leverage strategy, and high liquidity. However, the high expense ratio and inherent risks associated with emerging markets equities are factors to consider.

Resources and Disclaimers:

• ProShares website: https://www.proshares.com/ueo
• ETF Database: https://etfdb.com/etf/UEO/proshares-ultra-msci-emerging-markets/

Disclaimer: This is not financial advice. Please do your own research before investing in any ETF.