Inside ProShares’ bull and bear levereaged homebuilding ETFs

Over the last few months, issuers have been showing immense interest in the housing ETF space. Before 2015, the space was devoid of leverage and inverse ETFs, but the industry filled this gap this year having seen housing ETF launches in all forms. In fact, a couple of bull/bear leveraged products targeted at the housing market are still in the pipeline.

Let’s take a look at two newly launched leveraged housing ETFs by ProShares designed in both long and short manners.

Newly Launched ETFs in Focus

ProShares Ultra Homebuilders & Supplies ETF (HBU) looks to offer double the daily exposure to the Dow Jones U.S. Select Home Construction Index while ProShares UltraShort Homebuilders & Supplies ETF (HBZ) gives twice the opposite exposure of the daily performance of the same index. Both funds charge 95 bps in fees.

The benchmark follows the performance of a basket of 40 homebuilding companies. The index is heavily concentrated on the top 10 holdings in which it puts around 65% of assets. Lennar CP Cl A (11.20%), D R Horton Inc (11.15%) and Pulte Group (8.47%) take the top three spots in the basket and make up for a combined 31% share.

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