The ProShares RAFI Long/Short ETF (NYSEArca: RALS) will get a new index at the close of U.S. markets today.
The exchange traded fund will begin tracking the FTSE RAFI US 1000 Long/Short Total Return Index. That index “allocates an aggregate equal dollar amount to both long and short equity positions. The long equity positions consist of the FTSE RAFI US 1000 Total Return Index, and the short equity positions consist of the Russell 1000 Total Return Index. By going long a “fundamental” index and short a market cap index, the index seeks to provide an alternative to traditional market cap weighting. The index is rebalanced monthly,” according to a statement issued by ProShares.
RALS is based on strategies developed by the “father of fundamental indexing,” Rob Arnott, and identifies opportunities that are implemented through both long and short securities positions. RALS tries to generate an absolute return through taking long equities positions while simultaneously hedging through short exposure.
ProShares sponsors other alternative ETFs, including the ProShares Morningstar Alternatives Solution ETF (NYSEArca: ALTS).
ALTS employs long-short strategies, hedge fund replication, managed futures, global infrastructure, merger & acquisitions, private equities and Treasury spread investments.
ProShares RAFI Long/Short ETF
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