First Mover Americas: ProShares Dismisses Tracking Costs for Futures

Exchange-traded fund (ETF) specialist ProShares has dismissed concerns over the high expenses related to tracking commodity futures on its recently launched fund, focusing instead on the long-term benefits for investors. The ProShares First Mover Americas UCITS ETF offers European investors exposure to US equity market sectors through a unique strategy based on the future contracts rather than traditional equities.

Critics of the fund have noted the complexities and costs associated with managing futures contracts. ProShares has strongly refuted these concerns, arguing that the advantages of this approach outweigh any associated expenses. According to the company, the ETF leverages the ability to provide sectoral exposure with a much lower expense ratio than traditional ETFs, thanks to its futures-based investment strategy.

ProShares believes that tracking equity futures contracts instead of actual equities allows for cost savings in terms of fees and operational expenses. By utilizing futures contracts, the fund can efficiently allocate its assets across different sectors to provide investors with diversified exposure to US equity market sectors.

With its focus on futures, the ProShares First Mover Americas ETF aims to capture the returns of US equity sector futures with potentially higher returns and lower expenses compared to similar ETFs relying solely on equities. By using futures, the fund can manage its exposure dynamically, adjusting positions as needed, without the need to own or trade the underlying assets.

The fund offers investors several potential advantages, including transparency and liquidity. The disclosure requirements for futures contracts generally provide investors with more visibility into the underlying securities and their performance. Futures markets tend to be more liquid than specific equities, ensuring that investors can trade the ETF’s shares with ease.

Some critics argue that the fund’s complicated structure could deter investors or result in unexpected costs. ProShares has been quick to point out that this strategy has already been proven successful in the US markets. The company’s US-equivalent fund, launched in 2009, has seen significant growth and performance success, demonstrating that this futures-based approach can yield positive results for investors over time.

Despite the encouraging prospects, it is important for potential investors to thoroughly understand the risks and nuances associated with futures-based investments. These instruments are generally more complex than traditional equities and can involve higher levels of leverage and price volatility.

ProShares strongly advises potential investors to carefully consider their investment objectives and risk appetite before making any investment decisions. By fully understanding the fund’s investment strategy and the potential risks involved, investors can mitigate any potential downside while seeking long-term growth opportunities in US equity market sectors.

ProShares remains confident in its unique offering and the long-term benefits it presents to investors. The company dismisses concerns over the higher costs associated with managing futures contracts, emphasizing the advantages it offers, including cost savings, transparency, liquidity, and dynamic exposure management. While this approach may not be suitable for all investors, those with a deeper understanding of futures-based investments and a tolerance for associated risks could find ProShares’ First Mover Americas UCITS ETF to be an attractive addition to their portfolios.

Disclaimer: The information provided in this article is for educational purposes only and should not be considered as investment advice.