ProShares gives details on Investment Grade - Interest Rate Hedged fund

By Toni Weeks

San Luis Obispo, Calif., Nov. 4 - ProShares Trust gave details about its new ProShares Investment Grade - Interest Rate Hedged fund in an N-1A filing with the Securities and Exchange Commission.

The fund will seek investment results, before fees and expenses, that track the performance of the Citi Corporate Investment Grade (Treasury Rate-Hedged) index.

The fund is comprised of (a) long positions in dollar-denominated investment-grade corporate bonds issued by both U.S. and foreign domiciled companies and (b) short positions in U.S. Treasury notes or bonds of, in aggregate, approximate equivalent duration to the investment-grade bonds.

Under normal conditions, the fund will invest at least 80% of its total assets in component investment-grade securities of the index.

By taking short Treasury security positions, the index seeks to mitigate the potential negative impact of rising Treasury interest rates on the performance of investment-grade bonds, conversely limiting the potential positive impact of falling interest rates. The short positions are not intended to mitigate other factors influencing the price of investment-grade bonds, such as credit risk, which may have a greater impact than rising or falling interest rates.

The long investment-grade bond positions in the index are designed to represent the more liquid universe of investment-grade bonds offered within the United States.

Jeffrey Ploshnick will be the portfolio manager.

The ticker symbol is "IGHG."

The investment adviser, Bethesda, Md.-based ProShares Advisors, is limiting total annual fund operating expenses to 0.3% through Sept. 30, 2015.

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