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ProShares lowers net expense ratio for CSM

ProShares, a provider of alternative exchange-traded funds, is lowering the net expense ratio for CSM, a Morningstar rated 5-star ETF, from 95 to 45 basis points.

CSM provides an alternative approach for investors who want to outperform large cap indexes, but do not have faith in actively managed mutual funds.

“CSM combines the discipline and transparency of indexing with an opportunity to beat traditional index returns,” says Michael Sapir, chairman and chief executive of ProShare Advisors, ProShares’ investment adviser. “We’re pleased that now CSM will be even more competitive with other large cap options.”

CSM seeks investment results, before fees and expenses, which track the Credit Suisse 130/30 Large Cap index, a rules-based benchmark designed to outperform an index of the 500 largest capitalisation US stocks. It was created in 2007 by recognised experts in quantitative finance – MIT Professor Andrew W Lo and Pankaj N Patel of Credit Suisse. The index has 100 per cent equity exposure and can be expected to move in the same direction as large cap stocks. However, its methodology provides more sources of potential return than a typical large cap index. The index overweights positions in stocks expected to rise and, rather than just underweighting those expected to fall, seeks profit from short exposure.

ProShares is also changing the ETF’s name to ProShares Large Cap Core Plus from ProShares Credit Suisse 130/30 to better reflect its role in the large cap portion of a portfolio. The name change will not affect the fund’s holdings or its strategy.

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