After the launch of the PIMCO Total Return ETF (NYSEArca: BOND), the industry is seeing a renewed interest in actively managed exchange traded fund products. ProShares is the most recent provider to evince its desire to enter the space, filing for its first active plan with the Securities and Exchange Commission.
According to an SEC filing, ProShares seeks to launch the actively managed ProShares Emerging Market Debt, which will hold at least 80% of its assets in a diversified portfolio of fixed income instruments from the emerging markets issued by governments, corporations and other issuers domiciled in developing countries.
It should be noted that the fund managers may designated a large weighting in issuers of a single country or region. However, the fund does not say whether or not the fund will exclusively hold dollar denominated holdings or foreign currency denominated debt.
Additionally, the fund may hold individual fixed-income securities, equity securities, such as other ETFs, and currencies. The ETF will not invest in options contracts, futures contracts or swap agreements; however, ProShares may use derivatives in the future if future regulatory action permits it.
“The Initial Fund will offer a simple and efficient way to gain exposure to a diversified basket of emerging market debt instruments while preserving the opportunity to outperform the relevant benchmark index,” according to the filing.
The ProShares fund will likely compete with existing emerging market debt funds like the WisdomTree Asia Local Debt Fund (NYSEArca: ALD) and WisdomTree Emerging Market Local Debt Fund (NYSEArca: ELD), which are both denominated in foreign currencies.
For more information on active ETFs, visit our actively managed ETFs category.
Max Chen contributed to this article.