A bull-and-bear pair of ProShares Europe-focused equities
will begin tracking a FTSE index April 23, ditching its current
MSCI benchmark in what is the latest victory for the global index
provider over its competitor.
Both the ProShares Ultra MSCI Europe ETF (NYSEArca:UPV) and its
bearish counterpart, the ProShares UltraShort MSCI Europe ETF
(NYSEArca:EPV) will each drop the 'MSCI' part of their current
monikers when they are officially linked to the performance of the
FTSE Developed Europe Index. Tickers and fees should remain
The FTSE index is the same benchmark that now anchors the $10.2
billion Vanguard FTSE Europe ETF (NYSEArca:VGK), a fund that until
March was also tied to the MSCI Europe Index, but one that was part
of a major Vanguard overhaul that resulted in 22 of its ETFs
dropping their MSCI benchmarks for FTSE and CRSP indexes.
It's unclear whether ProShares' decision was designed to reduce
overall indexing costs, as was the case with Vanguard. The firm
told IndexUniverse in a statement that the switch is due to
'portfolio management considerations.'
'We value our close relationship with MSCI and continue to
partner with them on 14 of our ETFs,' ProShares Advisors said in
Still, the latest move certainly not only bodes well for FTSE,
but again puts the importance of index providers back into the
"Indexes are critically important because an index's methodology
dictates the selection and weighting of your investment portfolio,"
IndexUniverse ETF analyst Spencer Bogart recently said in a blog
about the issue. "Fee structures can vary but, at the end of the
day, bigger index fees mean a smaller piece of the pie for
UPV serves up exposure to two times the daily performance of its
index, while EPV is a twice-inverse strategy, each costing a net of
0.95 percent a year. On the surface, the index change should not
significantly alter the composition of either fund.
The FTSE Developed Europe Index is a
market-capitalization-weighted index comprising about 500 large and
midcap companies in 16 developed European markets, including the
U.K., which represents about 34.5 percent of the mix. The blend and
focus is nearly identical to that of the MSCI Europe Index.
Holding Switzerland, France and Germany among its biggest
country allocations other than the U.K, the FTSE index has seen
year-to-date total dollar returns of 2.9 percent, with that number
hitting 11.3 percent in the past one year, according to data
provided by FTSE-a performance very similar to the return profile
of the MSCI benchmark it's replacing, according to data on MSCI's
UPV has under $11 million in assets, while EPV has some $95
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