Are you pessimistic about the markets and expect a pullback in the near future? Well, ProShares is now offering three new single inverse exchange traded funds (ETFs) that target China, real estate and basic materials.
The new ETFs try to reflect the single inverse, or -100%, performance of the FTSE/Xinhua China 25 Index, or to the Dow Jones U.S. Real Estate or U.S. Basic Materials Indexes. It should be noted that Ultra and Short ProShares ETF were designed to reflect the returns of an index or other benchmark for a single day. [ProShares Launches More Inverse Funds.]
Before you purchase a leveraged or inverse ETF, read our special report to fully understand how they work. These ETFs are not for everyone.
China. Prices in the country rose 2.7% last month from a year earlier. There probably won’t be a shift in economic policy, according to economists, but Chinese consumers might see a hike in loan rates in an attempt to tamp out inflation. That could, in turn, slow China’s growth. [China’s Tightening Hits Markets and ETFs.]
ProShares Trust Short FTSE/Xinhua China ETF (NYSEArca: YXI). FXI has 25 holdings and an expense ratio of 0.95%.
Top holdings include: China Mobile Ltd. 9.4%, China Construction Bank-Class H 8.9%, China Life Insurance Co.-Class H 8.7% and Industrial & Commercial Bank of China-Class H 7.3%.
Top sectors include: Financial 46.9%, Energy, 20.2%, Communications, 16.7% and Industrial 8.9%.
Real Estate. Although February’s home sales fell 0.6% last month from January – less bad than economists had anticipated – it’s being taken as a signal that the housing market is still in a slump that won’t abate anytime soon. Case in point: today’s news that new home sales tanked to a record low last month. It can’t be good when buyers can’t even be goaded with government tax credits or low, low mortgage rates. One positive: the rate of decline has slowed, and that’s something. [Real Estate ETFs: Big Improvements, Big Problems.]