ProShares replaces Managed Futures fund with new active ETF

Feb 21st, 2016 | By | Category: ETF and Index News

Exchange traded fund provider ProShares has launched the ProShares Managed Futures Strategy ETF (BATS: FUT) to replace the ProShares Managed Futures Strategy (FUTS) in a bid to generate greater investor appeal by providing active management and a more efficient tax-structure.

Managed futures strategies attempt to identify price trends in the futures markets, and can establish either long or short positions across asset classes such as commodities, currencies and fixed income to capture enhanced returns.

ProShares revamps Managed Futures fund with new active ETF

Michael Sapir, Chairman and CEO of ProShare Advisors.

Michael L. Sapir, chairman and CEO of ProShare Advisors, commented: “Managed futures have the potential to deliver positive returns in both rising and falling markets. With their low correlation to both stocks and bonds, managed futures strategies can also help diversify a stock and bond portfolio.”

FUT utilizes an innovative risk-weighting methodology, applied at each monthly rebalancing period. The process involves optimising the portfolio to ensure each commodity, currency, and fixed income position contributes an equal amount of estimated risk.

As of 18 February 2016, the fund’s commodity-based strategy had long positions in lean hogs and gold, and short positions in Chicago wheat, corn, soybeans, coffee, sugar, cocoa, cotton, live cattle, heating oil, unleaded gasoline, WTI crude oil, natural gas, copper and silver; the currency-based strategy held long positions in the euro and Japanese yen, and short positions in the Australian dollar, British pound, Canadian dollar and Swiss franc; and the fixed income portfolio held long positions in both US Treasury Notes and Treasury Bonds. The fund uses the S&P Strategic Futures Index as a performance benchmark and charges ongoing fees of 0.75%.

FUT has been registered as a 1940 Act fund, compared to the commodity pool status of FUTS. The change in fund structure removes the K-1 tax form requirement, helping investors streamline their tax returns. ProShares Managed Futures Strategy (FUTS) will begin liquidating assets on 21 March 2016.

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