Products February 22, 2007

ProShares Launches ETFs Tied to Russell Style Benchmarks

ProShares has announced the addition of 12 exchange traded funds (ETFs) to the ProShares lineup.
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A news release from the New York firm said the new ProShares, benchmarked to six Russell style indexes, are the first ETFs or mutual funds designed to provide short or magnified exposure to growth and value indexes with large, mid, and small-cap versions of each.

“Investing in a specific style mutual fund or ETF has long been an easy way to tilt a portfolio’s exposure toward growth or value,” said Michael Sapir, CEO of ProShare Advisors LLC, part of ProFunds Group, in the news release. “Now, by simply buying an ETF, fund investors can seek to hedge gains in other style investments with short exposure, or seek to increase the buying power of their investment dollar with magnified exposure.”

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The newest ProShares provide short and magnified exposure to each of six Russell indexes. The UltraShort version of each is designed to provide twice the inverse of the daily performance of the applicable index (before fees and expenses), and the Ultra version is designed to double the daily performance of the applicable index (before fees and expenses).

Ultra Style ProShares (with benchmark and return goal)

  • Ultra Russell1000 Value, Russell 1000, Double
  • Ultra Russell1000 Growth, Russell 1000 Growth, Growth Double
  • Ultra Russell MidCap Value, Russell MidCap Value, Double
  • Ultra Russell MidCap Growth, Russell MidCap Growth, Double
  • Ultra Russell2000 Value, Russell 2000 Value, Double
  • Ultra Russell2000 Growth, Russell 2000 Growth, Double

UltraShort Style ProShares (with benchmark; all have return goal of double the inverse)

  • UltraShort Russell1000 Value, Russell 1000 Value
  • UltraShort Russell1000 Growth, Russell 1000 Growth
  • UltraShort Russell MidCap Value, Russell MidCap Value
  • UltraShort Russell MidCap Growth, Russell MidCap Growth
  • UltraShort Russell2000 Value, Russell 2000 Value
  • UltraShort Russell2000 Growth, Russell 2000 Growth

In the eight months since the initial launch of ProShares, the family has grown to more than $3 billion in assets, the company said. The new “style” funds bring ProShares’ total offering to 52 ETFs, covering broad market choices to specific sectors, according to the announcement.

More information is at http://www.proshares.com/.

Deals & People February 22, 2007

S&P Sells Fund Data Biz to Morningstar

Standard&Poor's is selling its mutual fund data business to Morningstar, including mutual fund data on performance, rankings and holdings on more than 135,000 funds in over 30 countries, as well as desktop applications and data feed products, for $55 million in cash.
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Under the agreement, Standard & Poor’s will license mutual fund data from Morningstar for use in Standard & Poor’s fund ratings and research products and services.
Resource Focus
S&P described the move as an effort to “focus resources on its core analytical services for the global fund industry,’ noting that the firm continues to experience increasing demand from wealth managers and leading fund distributors for its independent fund ratings and research, which include fund management ratings, fund research and selection services, and money market and bond fund ratings. The companies expect to complete the transaction in March, subject to customary closing conditions.
“Historical fund data is used as a screen for our fund ratings and research business, but is not core to our business of providing independent qualitative ratings and analysis for the global fund industry,’ said Deven Sharma, Executive Vice-President at Standard & Poor’s, in a press release.
Ratings versus Rankings
Standard & Poor’s fund rating is a forward-looking opinion of the quality of a fund’s management, based on an in-depth analysis, qualitative analysis of its investment process and consistency of approach. Standard & Poor’s will continue to build and develop this business. On the other hand, Standard & Poor’s fund ranking is a quantitative assessment of the past performance of a mutual fund compared to that of its peers in its respective style group. Standard & Poor’s fund rankings are part of the mutual fund data business sold to Morningstar.
“Our market-leading qualitative fund ratings and research business has grown significantly over the last few years, specifically our fund management ratings business, which currently rates over 2,200 funds globally,” said Sharma. “As a result, we have ambitious plans to expand the fund ratings and research business by widening the pool of funds that we rate, increasing our research capacity and developing additional distribution channels throughout the world for our market-leading analysis and opinions. Our fund management ratings supplement quantitative historical performance with qualitative fund manager evaluation.”
Global Expansion for M’Star
“With the acquisition of Standard and Poor’s fund data business, we believe we’ll have the most extensive global database for managed investment products in the industry. The combination of Morningstar’s industry-standard investment data and Standard and Poor’s international mutual fund data will significantly strengthen our global database and our offerings to investors,’ said Joe Mansueto, chairman and chief executive officer of Morningstar, in a press release. Mansueto also said the transaction would give Morningstar a “much stronger presence outside the United States, particularly in Europe, where Standard and Poor’s has operated for more than 20 years.’

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