Guide To ETF Providers: ProShares

ProShares was established in 2006 by the founders of ProFunds, a firm that was launched in 1997. ProShares is the largest manager of inverse and leveraged funds, or "geared ETFs," in the world. Each geared ETF seeks a return that is either 3X, 2X, -1X, -2X or -3X the return of an index or other benchmark for a single day (as measured from one NAV calculation to the next). The introduction of Short ProShares signified the first ETF developed to profit in response to a declining benchmark. Ultra ProShares (many leveraged ETFs are called "ultra") were the first ETFs to seek two-times the daily performance of their tracking indexes and benchmarks.

Today, ProShares offers more than 130 ProShares ETFs, with a variety of ETF families including:

• Global Fixed income ProShares - to diversify fixed-income holdings
  
  
• Hedge Strategies ProShares - advanced investment strategies
  
  
• Geared ProShares - inverse and leveraged exposure to equities, fixed income, currencies and commodities
  
  
• Inflation and Volatility ProShares - exposure to expected inflation or implied market volatility

ProShares ETFs cover numerous asset classes including commodities, currencies, fixed income (domestic and international), inflation, international, long/short, market cap, sector, style and volatility. The funds are based on popular indexes and benchmarks such as Barclays, Dow Jones, FTSE, iBoxx, MSCI, Nasdaq, Russell and Standard & Poor's.

Headquartered in Bethesda, Maryland, just outside Washington, D.C., ProShares' expense ratios range between 0.25 and 0.95%, with an average expense ratio of 0.93%.

Figure 8: ProShares\' top five largest funds by AUM. Information current as of Feb. 8, 2013.