ProShares Positioning in ETFs

ProShares, a major purveyor of leveraged and inverse exchange traded fund strategies, expects huge growth in ETFs ahead, along with rising appetite for alternative strategies to navigate quickly changing market conditions.

We are heading into the ninth year in the equities bull market and seeing a three decade bull run in bonds. Consequently, investors should begin to consider hedging and alternative strategies if we see volatility and corrections after these extended rallies.

For instance, Simeon Hyman, Head of Investment Strategy at ProShares, pointed out that there is big appetite for leveraged and inverse crude oil exposure to hedge or capitalize on moves in the energy markets as production cuts out of the Organization of Petroleum Exporting Countries, upstart hydraulic fracturing or fracking industry, environmental considerations and swings in the U.S. dollar all weigh on the crude outlook.

ProShares partnered up with UBS and recently launched the UBS ETRACS – ProShares Daily 3x Long Crude ETN (NYSEArca: WTIU) and UBS ETRACS – ProShares Daily 3x Inverse Crude ETN (NYSEArca: WTID).

“ProShares saw the opportunity. UBS wanted to work with Proshares and leverage the ProShares brand. The largest provider of ETNs joining with the largest provider of inverse and leverage,” Morgan Gold, managing director and head of marketing, told ETF Trends in a call.

The two exchange traded notes may quench the large demand for a bullish or bearish view on the crude oil market, potentially filling in the void left by Credit Suisse’s delisting of its popular oil-related ETNs.