ProShares to launch four 'specialty' ETFs to track inflation outlook

By Toni Weeks

San Diego, Dec. 29 - ProShares Trust announced in an N-1A filing with the Securities and Exchange Commission the Jan. 12 launch of four "specialty" ProShares exchange-traded funds that will track market expectations for inflation.

The ProShares 30 Year TIPS/TSY Spread, which will trade under the symbol "RINF," seeks investment results, before fees and expenses, that track the performance of the Dow Jones Credit Suisse 30-Year Inflation Breakeven Index, which tracks the performance of long positions in the most recently issued 30-year Treasury Inflation-Protected Securities (TIPS) bond and duration-adjusted short positions in U.S. Treasury bonds of the closest maturity.

Both the fund and the index are designed to appreciation as the breakeven rate of inflation increases. The fund is not designed to provide a steady stream of income.

Under normal circumstances, the fund will invest at last 80% of its total assets in securities of the index along with derivatives and other fixed-income securities that, in combination, should track the performance of the index.

The ProShares UltraPro 10 Year TIPS/TSY Spread, which will trade under the symbol "UINF," seeks investment results for a single day at a time that track the performance of the Dow Jones Credit Suisse 10-Year Inflation Breakeven Index.

The fund will invest in fixed-income securities and derivatives that, in combination, should have similar daily return characteristics as three times the daily return of the index, which tracks the performance of long positions in the most recently issued 10-year TIPS bond and duration-adjusted short positions in U.S. Treasury notes of the closest maturity. The fund and the index are designed to appreciate as the breakeven rate of inflation increases. The index is not designed to measure the realized rate of inflation, nor does it seek to replicate the returns of any index or measure of actual consumer price levels.

The ProShares Short 30 Year TIPS/TSY Spread will trade under the symbol "FINF" and seeks investment results for a single day that tracks the return of the Dow Jones Credit Suisse 30-Year Inflation Breakeven Index. The fund will invest in a combination of fixed-income securities and derivatives that, in combination, should have similar daily return characteristics as the inverse of the daily return of the index.

The ProShares UltraPro Short 10 Year TIPS/TSY Spread will trade under the symbol "SINF" and seeks investment results for a single day corresponding to three times the inverse of the daily performance of the Dow Jones Credit Suisse 10-Year Inflation Breakeven Index. It will seek leveraged returns inverse to the index and only on a daily basis.

Michelle Liu will be the portfolio manager for the four funds. Liu has been a portfolio manager for ProShare Advisors since 2009 and an associate portfolio manager from 2007 to 2009. Prior to that, she was a senior market operations analyst for FINRA from 2006 to 2007 and a fixed-income domain lead/specialist from 2004 to 2006.

All four funds will carry investment advisory fees of 0.55%. Including other expenses, the total annual operating expenses after fee waivers and expense reimbursements are expected to be 0.75%.

The funds' investment adviser is Bethesda, Md.-based ProShare Advisors LLC.

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