ETF spotlight on ProShares Credit Suisse 130/30 (NYSEArca: CSM), part of an ongoing series.
Assets: $108.16 million.
Objective: The ProShares Credit Suisse 130/30 tries to reflect the performance of the Credit Suisse 130/30 Large-Cap Index, which replicates an investment strategy that takes long and short positions in select securities from the 500 largest U.S. stocks in attempt to outperform the broad large-cap universe.
So-called 130/30 funds have been popular with institutional investors, and some exchange traded funds have incorporated the strategy. The funds are designed to beat an index by shorting 30% and using the proceeds to increase the long side of the portfolio to 130%. The net market exposure is 100%. The funds are designed to deliver outperformance, or alpha.
In CSM, the tracking index put together by Credit Suisse ranks large-cap stocks, and those with the lowest scores are shorted. Investors who short a security are attempting to profit by a decline in its price.
CSM has posted a one-year gain of 8.8%, compared with an 8.2% advance for the S&P 500, according to Morningstar.