ProShares Short MSCI Emerging Markets (EUM)

Overview

ProShares Short MSCI Emerging Markets (EUM) seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the MSCI Emerging Markets Index. It provides a way to profit from declines in emerging market equities.

Reputation and Reliability

ProShares is a well-known issuer specializing in leveraged and inverse ETFs.

Management Expertise

ProShares has extensive experience in managing inverse and leveraged ETFs.

Goal

To deliver daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the MSCI Emerging Markets Index.

Investment Approach and Strategy

Strategy: The ETF uses financial instruments such as swap agreements to achieve its inverse objective. It aims to provide the opposite of the daily return of the MSCI Emerging Markets Index.

Composition The ETF primarily holds financial instruments designed to provide inverse exposure to the MSCI Emerging Markets Index, such as swap agreements.

Market Share: The ETF market share in its sector depends on total AUM for Short Emerging Market ETFs, which fluctuates.

Total Net Assets (AUM): 60970000

Key Competitors

• Direxion Daily Emerging Markets Bear 3X Shares (EDZ)
• ProShares UltraShort MSCI Emerging Markets (EEV)
• AdvisorShares Dorsey Wright Short ETF (DWSH)

Competitive Landscape

The competitive landscape involves firms providing inverse or leveraged exposure to emerging markets. EUM benefits from the established ProShares brand but faces competition from leveraged funds offering higher multiples. EUM's primary advantage lies in its simple inverse approach, while competitors may offer more aggressive strategies or broader coverage.

Historical Performance: Historical performance varies depending on the performance of the MSCI Emerging Markets Index. Being an inverse ETF, it tends to perform well when the index declines and vice versa.

Benchmark Comparison: The ETF aims to provide the inverse of the MSCI Emerging Markets Index's daily performance. Tracking error may occur due to fees, expenses, and rebalancing.

Expense Ratio: 0.95

Average Trading Volume

The ETF's average trading volume can vary, but generally, it maintains moderate liquidity allowing for relatively easy entry and exit.

Bid-Ask Spread

The bid-ask spread varies depending on market conditions and trading volume, generally tight but can widen during periods of high volatility.

Market Environment Factors

Economic growth, political stability, currency fluctuations, and investor sentiment in emerging markets significantly impact EUM's performance.

Growth Trajectory

Growth depends on the outlook for emerging markets; increased volatility or negative forecasts can lead to higher demand for inverse products.

Competitive Edge

EUM's competitive edge stems from the established ProShares brand and focused inverse exposure to the MSCI Emerging Markets Index. It offers a straightforward and liquid way to hedge against or profit from declines in emerging markets. The ETF provides targeted exposure, making it attractive for investors with a specific negative outlook on emerging market equities. Its simplicity distinguishes it from leveraged competitors, appealing to risk-averse investors seeking a less aggressive approach to shorting.

Volatility

The ETF experiences high volatility due to its inverse nature and the inherent volatility of emerging markets.

Market Risk

The ETF is exposed to the market risk of emerging market equities, including economic, political, and currency risks.

Ideal Investor Profile

EUM is suitable for sophisticated investors with a short-term negative outlook on emerging market equities. Investors should understand the risks associated with inverse ETFs and the impact of daily rebalancing.

Market Risk

EUM is best suited for active traders and short-term investors seeking to hedge against or profit from short-term declines in emerging markets; not appropriate for long-term buy-and-hold investors.

ProShares Short MSCI Emerging Markets (EUM) provides inverse exposure to the MSCI Emerging Markets Index, making it useful for short-term hedging or speculation. Its performance is directly tied to the index's declines, but daily rebalancing and fees erode long-term returns. The ETF is best suited for sophisticated traders with a negative outlook on emerging markets. Despite its limited suitability for long-term investment, EUM remains a liquid and accessible option for short-term tactical allocations.

Data Sources:

• ProShares
• ETF.com
• Bloomberg
• Yahoo Finance

Disclaimers:

The data and analysis provided are for informational purposes only and do not constitute financial advice. Investment decisions should be made based on individual circumstances and consultation with a qualified financial advisor. Past performance is not indicative of future results. Inverse ETFs carry unique risks and are not suitable for all investors.