WSJ | October 27, 2019
According to WSJ’s Michael Wursthorn, many asset managers believe the ETF industry is “entering a new phase of competition and oversaturation,” noting that over 90 funds have closed this year. ProShares' CEO Michael Sapir says it’s become harder to expand in the marketplace as more participants enter the ETF industry, leading to “a lot of roadkill out there.” Wursthorn points out that though ETF’s assets are growing, only 100 funds captured 83% of those assets, managed by the largest ETF providers. He notes that firms such as ProShares are launching niche funds with less competition and highlights PAWZ, the first ETF that allows investors to capitalize on people’s passion for their pets. See PAWZ performance.
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Geared (leveraged or short) ProShares ETFs seek returns that are a multiple of (e.g., 2x or -2x) the return of a benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, holding periods of greater than one day can result in returns that are significantly different than the target return and ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings as frequently as daily. Investors should consult the prospectus for further details on the calculation of the returns and the risks associated with investing in this product.
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