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ProShares Drafts German Bond ETF

ProShares, the Bethesda, Md.-based firm known for its inverse and leveraged strategies, filed paperwork with the Securities and Exchange Commission to market the first-ever ETF focused solely on German-issued debt.

The ProShares German Sovereign/Sub-Sovereign ETF will invest in investment-grade fixed-rate debt securities from Germany’s federal government as well as from local government and government-backed agencies in the northern European country. The bonds must have a minimum principal outstanding of $1 billion and have at least one year to maturity.

The only other German-debt-focused offerings on the market today are the single-exposure PowerShares DB German Bund Futures ETN (NYSEArca:BUNL) and the triple-exposure PowerShares DB 3X German Bund Futures ETN (NYSEArca:BUNT). BUND has gathered more than $30 million in five months, while the leveraged BUNT has almost $33 million in assets, according to data compiled by IndexUniverse.

The timing of the filing is certainly noteworthy. All eyes have been on Germany, one of the few developed countries to have avoided the borrowing binge that has left so much of the developed world flat on its back. Germany looms as the one European country with the financial wherewithal to bail out its more profligate neighbors, though public sentiment in Germany appears to be solidly against such an outcome for Europe's widening sovereign debt crisis.

The proposed ProShares fund will also include derivatives, such as swap contracts, as well as money market instruments intended for the short term such as U.S. Treasury bills and repurchase agreements, the filing said.

The company didn't disclose a planned ticker or annual expense ratio for the fund.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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