December 09, 2010 at 10:39 AM EST
ProShares Launches Long/Short RAFI ETF
ProShares, the Maryland-based ETF issuer known as a pioneer of leveraged exchange-traded products, announced today the latest addition to its product line. Like many of the new products hitting the market in recent weeks, the ProShares RAFI Long/Short (RALS) will be the first of its kind. RALS will seek to replicate the RAFI U.S. Equity Long/Short Index, a benchmark that utilizes the fundamental weighting methodologies developed by Research Affiliates that have gained impressive traction with investors in recent years. The RAFI methodology offers an alternative to traditional market capitalization-weighting strategies, under which a direct link exists between the price of a stock and the weighting that the security receives in an index. While there are many advantages to cap weighting–including simplified maintenance–the rise of the ETF industry has contributed to greater scrutiny on construction methodologies. Cap weighted indexes will have a tendency to overweight overvalued stocks and underweight undervalued stocks, [...] Click here to read the original article on ETFdb.com. Related Stories: ProShares Planning Long/Short ETF Does Your Portfolio Need A “RAFI ETF”? ProShares Planning Short, Leveraged Regional Bank ETFs
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