ProShares MSCI Transformational Changes ETF (ANEW)

The index tries to capture companies driving transformative change across the global economy—not a collection of the same mega-cap technology names that show up in every broad-market fund.

ANEW is ProShares’ entry into thematic indexing, specifically the theme of transformational change. Rather than holding all large-cap companies or all technology stocks, the fund tracks the MSCI Transformational Changes Index, which applies a screen to identify global large-cap companies that MSCI’s analysts judge to be leading in disruptive innovation. The objective is to offer investors a narrower, more intentional portfolio than a standard index but still one that is rules-based and transparent, not a black-box stock-picker’s bet.

The underlying index methodology is crucial. MSCI starts with large-cap equities globally and applies proprietary rules to identify companies that derive revenue from or significantly operate in areas of transformative change. The current index captures companies across sectors: information technology is overweight (as expected), but the index also includes financial technology disruptors, healthcare innovators, industrial automation and robotics companies, and firms in climate-transition categories. A company in the index might be a semiconductor designer, an electric-vehicle maker, a biotech firm focused on gene therapy, a fintech challenger, or an industrial-automation platform.

Because ANEW is sector-agnostic in design (it aims to capture transformation wherever it occurs), its holdings are more diversified than a pure tech fund but more concentrated than a true market-weight index. The result is higher sector concentration in technology but meaningful exposure to other areas where MSCI identifies transformative activity. The index is reconstituted periodically as MSCI updates its view of which companies are leading transformation and which are falling behind.

Holdings change as the methodology rolls. When companies MSCI deems transformative fall out of favour or lose their competitive edge, they are dropped. When new innovators rise, they are added. This is not passive in spirit—the index is not simply holding whatever is biggest—but it is rules-based, not subjective. The fund’s turnover depends on how much the MSCI universe shifts, which can vary by year.

ANEW’s performance is tethered directly to whether MSCI’s transformational theme actually outperforms. During periods when disruptive companies are in favour and capital is flowing toward innovation (as happened in the 2010s and early 2020s), a transformational-change index tends to outperform a broad market index. During periods when investors prioritize stability, valuations compress, or the market rotates toward dividend-paying classics, transformational-change ETFs underperform because they concentrate in the less-favoured segments. There is no guarantee that transformation is always the best theme or that MSCI’s definition of it aligns with the eventual winners.

The fund carries an expense ratio typical of a ProShares thematic ETF—moderate, reflecting the fact that the index is rules-based and does not require active stock-picking, but higher than a plain-vanilla broad-market index because of the index customization overhead. Liquidity depends on the size of the fund and trading interest; larger thematic ETFs are more liquid than niche ones.

Research into ANEW requires first understanding the methodology. MSCI’s website details which companies are in the index, how they are weighted, and how the selection rules work. The prospectus explains the index construction and reconstitution schedule. An investor evaluating ANEW should ask: what exactly is MSCI capturing under “transformational”? Are these companies that have already won (and whose valuations reflect that success), or are they genuine early-stage disruptors with runway ahead? How concentrated is the fund in any single sub-theme, and is that risk acceptable? How has the strategy performed over full market cycles, especially periods when growth was out of favour? The index-provider documents and historical performance data are the foundation.