Tag Archives: proshares

ProShares Doubles Dividend Growth ETF Lineup

Summary ProShares recently launched two new dividend growth ETFs. A look at the methodology behind the underlying dividend indices. The ETFs include companies with a history of raising dividends. By Todd Shriber & Tom Lydon Looking to build on the success of the ProShares S&P 500 Aristocrats ETF (NYSEArca: NOBL ) , ProShares doubled the size of its dividend growth ETF suite today with the introduction of two new funds. Joining NOBL and the ProShares MSCI EAFE Dividend Growers ETF (NYSEArca: EFAD ) as ProShares dividend growth ETFs are the ProShares Russell 2000 Dividend Growers ETF (NYSEArca: SMDV ) and the ProShares S&P MidCap 400 Dividend Aristocrats ETF (NYSEArca: REGL ) . Like, NOBL, the ProShares S&P MidCap 400 Dividend Aristocrats ETF tracks a dividend aristocrats index. The midcap dividend aristocrats index requires 15 consecutive years of increased dividends for inclusion whereas NOBL’s underlying index requires a minimum dividend increase streak of 25 years. REGL’s index is equal-weighted. The new ETF allocates a combined 47.6% of its weight to the utilities and financial services sectors with industrials and consumer staples combining for another 28.7%, according to ProShares data . The ProShares Russell 2000 Dividend Growers ETF, a dividend spin on the Russell 2000, the benchmark U.S. small-cap index, tracks the Russell 2000 Dividend Growth Index. That index includes small-cap firms with dividend increase streaks of at least a decade. Index constituents are screened for liquidity and dividend status, then selected and equal weighted subject to a maximum sector weight of 30%, according to Russell Investments. SMDV allocates almost 30.2% of its weight to financial services stocks, an overweight of more than 600 basis points to that sector relative to the Russell 2000. The new ETF also features a combined 34.3% weight to materials and utilities stocks. Those sectors combine for just over 8% of the Russell 2000. “Over the past 28 years, U.S. equities that grew dividends year over year returned 13.9%, while those that paid them without growing them returned 10.1%, according to Ned Davis Research. The findings are based on an analysis of companies underlying the Russell 3000 Index, a measure of the broad U.S. equities market, from February 2, 1987 through December 31, 2014,” said ProShares in a statement. Investors have gravitated to dividend growth ETFs , including NOBL. NOBL is just 16 months old and is already home to over $600 million in assets. The ETF was named ETF Product of the Year at the William F. Sharpe Indexing Achievement Awards. REGL and SMDV, the new ProShares dividend ETFs, each charge 0.4% per year. ProShares Russell 2000 Dividend Growers ETF Sector Weights Table Courtesy: ProShares Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

Correction Prep With These Inverse ETFs

U.S. equities have been on a multi-year bull streak. We are now seeing some weakness in the markets. Bearish, short ETFs to hedge against potential turns. With U.S. markets showing some chinks in the armor, investors can utilize inverse or short exchange-traded funds to hedge against a bearish turn. Some market observers point out that it has been over 1,200 days since the S&P 500 experienced a 10% or greater correction, reports John Melloy for CNBC . For those who are wary of a potential pullback in the S&P 500 index, there are a number of bearish or inverse ETF options with varying levels of leveraged exposure to capitalize off a weakening S&P 500. The ProShares Short S&P 500 ETF (NYSEARCA: SH ) takes a simple inverse or -100% daily performance of the S&P 500 index. Alternatively, for the more aggressive trader, leveraged options include the ProShares UltraShort S&P 500 ETF (NYSEARCA: SDS ) , which tries to reflect the -2x or -200% daily performance of the S&P 500, the Direxion Daily S&P 500 Bear 3x Shares ETF (NYSEARCA: SPXS ) , which takes the -3x or -300% daily performance of the S&P 500, and the ProShares UltraPro Short S&P 500 ETF (NYSEARCA: SPXU ) , which also takes the -300% daily performance of the S&P 500. Market participants are growing wary after a lackluster start to 2015, with poor earnings growth and a significant rally in 2014. According to a recent Investors Intelligence survey, 34.7% of polled strategists see a correction ahead, compared to 31% a week ago. “I believe that the end of Fed QE (cannot be replaced by ECB QE in its influence) and growing possibility in my mind of a June rate hike, at the same time earnings growth is slowing, dramatically raises the risk of a stock market correction,” Peter Boockvar, strategist for The Lindsey Group, said in the article. “After six years into a bull market where valuations are very stretched, investors should be watching their back and not swinging for any fences anymore.” Furthermore, looking at the fixed-income market, Bob Walters, who oversees the capital markets business for Quicken Loans, argues than an inverting yield curve could indicate a slowdown or recession could occur this year, reports Ron Insana for CNBC . Specifically, the flattening yield curve usually occurs during a slowdown and inverts during a recession where long-term rates are lower than short-term rates. The central bank typically hikes short-term rates to cool an overheating economy. Meanwhile, long-term bonds will see greater demand and yields fall as higher short-term rates help depress inflation expectations. Alternatively, investors can also capitalize off the fall in the widely viewed Dow Jones Industrial Average through the ProShares Short Dow 30 ETF (NYSEARCA: DOG ) , which tries to reflect the -100% daily performance of the Dow Jones Industrial Average. For the more aggressive traders, the ProShares UltraShort Dow 30 ETF (NYSEARCA: DXD ) takes the -200% of the Dow Jones and the ProShares UltraPro Short Dow 30 ETF (NYSEARCA: SDOW ) reflects the -300% of the Dow. Lastly, the ProShares Short QQQ ETF (NYSEARCA: PSQ ) takes the inverse or -100% daily performance of the NASDAQ-100 Index. For the aggressive trader, the ProShares UltraShort QQQ ETF (NYSEARCA: QID ) tracks the double inverse or -200% performance of the NASDAQ-100, and the ProShares UltraPro Short QQQ ETF (NASDAQ: SQQQ ) reflects the triple inverse or -300% of the NASDAQ-100. Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.