ProShares Launches Managed Futures ETF

ProShares, the largest issuer of inverse and leveraged exchange traded funds, continues to bolster its lineup of non-leveraged offerings with Thursday’s launch of the ProShares Managed Futures Strategy (NYSEArca: FUTS).

The new ETF tracks the S&P Strategic Futures Index, an index designed to exploit bullish and bearish scenarios in commodities futures markets. The S&P Strategic Futures Index is a rules-based index currently composed of 24 equally risk-weighted futures contracts in 16 commodity and eight financial markets. Positions are either long or short based on their price trends over the prior seven months, according to a statement issued by ProShares.

Managed futures strategies are also used in asset classes such as bonds and currencies, aiming to garner value in a variety of market conditions. Managed futures portfolios have historically provided risk-adjusted returns comparable to those of stocks with low correlation to the stock and bond markets, according to ProShares.

“With their low correlation to both stocks and bonds, managed futures strategies can be a smart choice for investors looking to enhance the risk-adjusted returns of a traditional portfolio,” said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, in the statement. “By offering access to alternatives like managed futures with the liquidity, transparency and cost effectiveness of ETFs, we’re helping investors build better portfolios

FUTS will compete with existing ETFs such as the WisdomTree Managed Futures Strategy Fund (NYSEArca: WDTI) and the First Trust Morningstar Managed Futures Strategy Fund (NYSEArca: FMF). Those ETFs have $178.8 million and $12.4 million in assets under management, respectively.