ProShares Equities for Rising Rates (EQRR) is built on a strategy specifically designed to provide relative outperformance during periods when interest rates increase. That’s because its underlying index is:
Built to Outperform as Rates Increase
Source: ProShares and Bloomberg, 8/4/20-9/30/22. Index information does not reflect any management fees, transaction costs, or expenses. Indexes are unmanaged, and one cannot directly invest in an index. Past performance does not guarantee future results.
A Rules-Based Approach
EQRR tracks the Nasdaq U.S. Large-Cap Equities for Rising Rates Index, which is built using a rules-based engine designed to target sectors that have outperformed as interest rates climb.
1. Focused On 5 Sectors with Outperformance Potential
The index first targets the five sectors that have had a tendency to outperform when rates rise – those sectors that have demonstrated the highest correlation with the 10-year U.S. Treasury yield over the prior 36 months. The sectors with the highest correlations receive the highest weighting.
Three-year average correlation of S&P 500 sectors to rising 10-year Treasury rates
Source: Bloomberg, as of 12/31/21. Sectors based on GICS classification within the S&P. For illustrative purposes only. Past performance does not guarantee future results.
2. Focused on 50 Stocks with Outperformance Potential
The index next targets 10 stocks within each of those sectors that have demonstrated the highest correlation to the 10-year U.S. Treasury yield over the past 36 months. The 10 stocks in each sector are then equally weighted.
3. Reconstituted Every 3 Months
The index is reconstituted using this rules-based approach on a quarterly basis, allowing both sectors and stocks to help keep pace with evolving market conditions.
Go On the Offensive when Rates Rise
EQRR has outperformed the S&P 500 as the 10-year Treasury yield has risen, and sector allocation and stock selection components were both key contributors to the fund's performance.
Source: FactSet, Bloomberg, 8/4/20-9/30/22. Performance is cumulative. Contribution is annualized.
A Compelling Strategy with the Convenience of an ETF
Equity strategists and portfolio managers have traditionally addressed rising rates environments with a variety of fragmented approaches. EQRR synthesizes these strategies with a rules-driven, sector and stock selection approach that delivers:
A focused strategy that includes only those U.S. large-cap sectors and stocks that have demonstrated a tendency to outperform when interest rates rise.
A complement to a core equity allocation for a rising rate environment.
The ease and convenience of an ETF.
Click here for fund performance.
S&P 500 performance numbers ending 9/30/22 were: -23.87% (year-to-date through Q3 2022); -15.47% (1 year); 8.15% (3 year); 9.23% (5 year); 9.39% (since EQRR inception 7/24/17). Index information does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged, and one cannot invest directly in an index.
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Shares are bought and sold at market price (not NAV) and are not individually redeemed from the fund. Market price returns are based upon the midpoint of the bid/ask spread at 4:00 p.m. ET (when NAV is normally determined for most funds) and do not represent the returns you would receive if you traded shares at other times. Brokerage commissions will reduce returns. Current performance may be lower or higher than the performance quoted. Standardized returns and performance data current to the most recent month end may be obtained here.
Equities for Rising Rates ETF
Seeks investment results, before fees and expenses, that track the performance of the Nasdaq U.S. Large Cap Equities for Rising Rates Index.