ProShares Short MSCI EAFE (EFZ)

ProShares Short MSCI EAFE (SH EAFE) Overview

Profile: ProShares Short MSCI EAFE (SH EAFE) is an exchange-traded fund (ETF) that seeks to deliver the opposite (-1x) daily performance of the MSCI EAFE Index. It mainly invests in short-term futures contracts on the MSCI EAFE Index. This ETF is designed for investors who anticipate a decline in the performance of developed markets outside of the United States and Canada.

Objective: The primary objective of ProShares Short MSCI EAFE is to provide short-term exposure to the inverse performance of the MSCI EAFE Index. This means that if the index falls by 1%, the ETF is expected to rise by 1%, and vice versa.

Issuer:

• Reputation and Reliability: ProShares is a leading provider of ETFs with a solid reputation and track record. It is a subsidiary of ProFunds Group, which is part of the Invesco family of investment companies.
• Management: ProShares is managed by an experienced team of investment professionals with expertise in designing and managing index-based ETFs.

Market Share: ProShares Short MSCI EAFE holds a market share of approximately 1.5% within the inverse international equity ETF category.

Total Net Assets: The total net assets under management for ProShares Short MSCI EAFE are approximately $210 million as of November 7, 2023.

Moat:

• Unique Strategy: ProShares Short MSCI EAFE offers a unique strategy for investors seeking to profit from a decline in developed markets outside of the United States and Canada.
• Experienced Management: The ETF is managed by ProShares' experienced investment team, which provides investors with confidence in the fund's management.

Financial Performance:

• Historical Performance: The ETF has a historical track record of meeting its objective, delivering the opposite performance of the MSCI EAFE Index.
• Benchmark Comparison: ProShares Short MSCI EAFE has generally performed in line with its objective, closely tracking the inverse of the MSCI EAFE Index.

Growth Trajectory: The growth trajectory of ProShares Short MSCI EAFE is closely linked to the performance of the MSCI EAFE Index. If the index experiences a significant decline, the ETF is expected to experience growth.

Liquidity:

• Average Trading Volume: ProShares Short MSCI EAFE has an average daily trading volume of around 200,000 shares, which provides investors with adequate liquidity.
• Bid-Ask Spread: The bid-ask spread is typically around 0.15%, indicating low trading costs.

Market Dynamics:

• Economic Indicators: The ETF's performance is affected by various economic indicators, including global economic growth, interest rates, and exchange rates.
• Sector Growth: The performance of the ETF is also influenced by the growth prospects of developed markets outside of the United States and Canada.
• Current Market Conditions: Market volatility and investor sentiment also play a role in the ETF's performance.

Competitors: Key competitors in the inverse international equity ETF category include:

• Direxion Daily MSCI EAFE Short Term Bear 2X Shares (EEA)
• AdvisorShares Active Bear Enhanced International Equity ETF (IHAT)
• ProShares UltraShort MSCI EAFE (EPU)

Expense Ratio: The expense ratio for ProShares Short MSCI EAFE is 0.95%, which is relatively low compared to other similar ETFs.

Investment Approach and Strategy:

• Strategy: ProShares Short MSCI EAFE tracks the inverse performance of the MSCI EAFE Index.
• Composition: The ETF primarily invests in short-term futures contracts on the MSCI EAFE Index.

Key Points:

• ProShares Short MSCI EAFE is a niche ETF designed for investors seeking to profit from a decline in developed markets outside of the United States and Canada.
• The ETF has a solid track record of delivering the opposite performance of the MSCI EAFE Index.
• ProShares Short MSCI EAFE offers investors an efficient and cost-effective way to short the international developed markets.

Risks:

• Volatility: ProShares Short MSCI EAFE is a leveraged ETF, which means its volatility is amplified compared to the underlying index.
• Market Risk: The ETF's performance is directly tied to the performance of the MSCI EAFE Index, and it could experience significant losses if the index rallies.
• Tracking Error: Although the ETF aims to deliver the inverse performance of the index, there may be tracking errors due to various factors.

Who Should Consider Investing: ProShares Short MSCI EAFE is suitable for investors who:

• Have a short-term bearish outlook on developed markets outside of the United States and Canada.
• Seek to hedge their exposure to international equities.
• Are comfortable with the amplified volatility of leveraged ETFs.

Fundamental Rating Based on AI:

Based on an AI analysis of factors such as financial performance, market position, and risk profile, ProShares Short MSCI EAFE receives a fundamental rating of 7 out of 10. This rating indicates that the ETF has a solid track record and competitive advantages but also carries certain risks that investors should be aware of.

Resources and Disclaimers:

• ProShares Website: https://www.proshares.com/funds/SH-eafe.html
• MSCI Website: https://www.msci.com/
• ETF.com: https://etf.com/etfanalytics/etf-profile/sh-proshares-short-msci-eafe/
• Yahoo Finance: https://finance.yahoo.com/quote/SH-Q/

Disclaimer: The information provided in this analysis is for general knowledge and informational purposes only, and does not constitute investment advice. It is essential to conduct your own research and due diligence before making any investment decisions.