ProShares UltraShort MSCI Emerging Markets (EEV)

Overview

ProShares UltraShort MSCI Emerging Markets (EEV) seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the MSCI Emerging Markets Index. It offers leveraged inverse exposure to emerging market equities.

Reputation and Reliability

ProShares is a well-known issuer of leveraged and inverse ETFs, with a track record of providing these types of products to the market.

Management Expertise

ProShares has a dedicated team managing its ETFs, with experience in structuring and managing leveraged and inverse investment strategies.

Goal

To provide daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the MSCI Emerging Markets Index.

Investment Approach and Strategy

Strategy: The ETF uses derivatives, such as swap agreements, to achieve its leveraged inverse exposure to the MSCI Emerging Markets Index.

Composition The ETF primarily holds financial instruments that provide exposure to the inverse performance of emerging market equities, including swap agreements, futures contracts, and cash.

Market Share: EEV's market share in the leveraged inverse emerging markets ETF sector is relatively small compared to broader emerging market ETFs.

Total Net Assets (AUM): 32579375.99

Key Competitors

• Direxion Daily Emerging Markets Bear 3X Shares (EDZ)
• ProShares Short MSCI Emerging Markets (EUM)

Competitive Landscape

The competitive landscape consists of other leveraged and inverse emerging market ETFs. EEV provides a specific -2x leverage factor and daily reset, which distinguishes it from competitors offering different leverage factors or non-daily resets. Advantages include potentially higher returns in a declining market, while disadvantages include higher volatility and potential for rapid value erosion in fluctuating or rising markets.

Historical Performance: Historical performance is highly dependent on the performance of the MSCI Emerging Markets Index. Due to the leveraged inverse nature, past performance is not indicative of future returns.

Benchmark Comparison: The ETF aims to provide two times the inverse of the daily performance of the MSCI Emerging Markets Index, so deviations are expected due to fees, expenses, and daily compounding effects.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume for EEV is moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread can vary, but typically represents a small percentage of the ETF's price, reflecting its liquidity.

Market Environment Factors

Economic indicators in emerging markets, global trade tensions, currency fluctuations, and investor sentiment toward emerging market equities all impact EEV.

Growth Trajectory

The growth trajectory of EEV is inversely correlated to the performance of emerging market equities and depends heavily on investor demand for inverse and leveraged products.

Competitive Edge

EEV's primary advantage is its specific -2x leveraged inverse exposure to the MSCI Emerging Markets Index, offering a targeted tool for investors seeking to profit from anticipated declines in emerging market equities. The daily reset feature provides precise daily exposure, although this can also lead to compounding effects over longer periods. ProShares' reputation as a provider of specialized ETFs also lends credibility. This ETF has a clear target and strategy that other similar products do not duplicate.

Volatility

EEV is a highly volatile ETF due to its leveraged and inverse nature, making it unsuitable for risk-averse investors.

Market Risk

The ETF is exposed to market risk related to emerging market equities, as well as risks associated with leveraged and inverse investments, including compounding effects and potential for significant losses.

Ideal Investor Profile

EEV is suitable for sophisticated investors with a high risk tolerance and a short-term investment horizon who believe emerging market equities will decline.

Market Risk

EEV is best suited for active traders who understand the risks of leveraged and inverse ETFs and can monitor their positions closely. It is not appropriate for long-term investors.

ProShares UltraShort MSCI Emerging Markets (EEV) provides a -2x leveraged inverse exposure to the MSCI Emerging Markets Index, designed for short-term tactical trading. It is a highly volatile product suitable only for sophisticated investors with a strong understanding of leveraged and inverse ETFs and those who have an opinion that emerging market equities will decline. Its performance is directly tied to the inverse movement of the MSCI Emerging Markets Index, amplifying both gains and losses. Due to the leveraged nature and daily reset, it is not appropriate for buy-and-hold strategies, as compounding effects can significantly impact long-term results.

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. Investing in leveraged and inverse ETFs involves significant risks, and investors should consult with a financial advisor before making any investment decisions.