ETF's To Short Some BRIC Countries, With Leverage (EPV, JPX, BZQ, SMK)

ProShares has just launched four new exchange-traded funds.  While these are not “all” BRIC countries (Brazil, Russia, India, China), BRIC investors will now get a couple of more tools to short sell those baskets when they want and with double-leverage.  Today’s launch was of UltraShort MSCI Europe (NYSE: EPV), UltraShort MSCI Pacific ex-Japan (NYSE: JPX), UltraShort MSCI Brazil (NYSE: BZQ), and UltraShort MSCI Mexico Investable Market (NYSE: SMK).  The new ETFs are the first designed to go up when markets go down in Europe, the Pacific Ex-Japan region, Brazil and Mexico.

UltraShort MSCI Europe (NYSE: EPV) tracks the MSCI Europe Index and has a correlation of -200% of the daily move.

UltraShort MSCI Pacific ex-Japan (NYSE: JPX) tracks the MSCI Pacific ex-Japan Index and has a correlation of -200% of the daily move.

UltraShort MSCI Brazil (NYSE: BZQ) tracks the MSCI Brazil Index and has a correlation of -200% of the daily move.

UltraShort MSCI Mexico Investable Market (NYSE: SMK) tracks the MSCI Mexico Investable Market Index and has a correlation of -200% of the daily move.

Because there are time differences in trading hours between U.S. and foreign markets, the net asset values of each index may not be computed as of the close of the U.S. markets.  As the U.S. is also the last market opened  on each trading day there may end up being discrepancies each day based on the moves in the U.S. markets compared to the actual closing bell averages of the competing markets.  So far we have not seen any trades go through in these ETF’s.  We’ll check back on these tomorrow to see if there is real trading volume.

Jon C. Ogg
June 18, 2009