The EQRR ETF is a passive product that tracks the Nasdaq US Large Cap Rising Rates Index. It holds US large-cap stocks whose share prices have a relatively high correlation with interest rate movements, seeking relative outperformance during periods of rising rates.

It suits investors who weigh the impact of the direction of US interest rates on equity styles and want to add rate-sensitive stock exposure that differs from broad market indexes.

It is a passively managed (index-tracking) ETF run by ProShares.

The index selects, from among US large-cap stocks, the group of companies whose relative performance shows a pronounced relationship with changes in interest rates. The fund follows the index's composition and weightings, and is designed to provide exposure that differs from traditional broad large-cap indexes when rates are rising. Official holdings data includes MPC, VLO, COP, CVX and OXY, which shows exposure to the energy sector.

• Stock selection focused on rate-sensitive characteristics
• Rules-based management through passive index tracking

Assets under management (AUM) stand at $41.3M, and the total expense ratio is 0.35% per year.

The EQRR ETF is a micro-cap product, so trading volume and bid-ask spreads can vary with market conditions. Investors should check order types and liquidity conditions before trading.

The performance of the EQRR ETF is affected not only by the direction of US interest rates but also by the share price movements of its holdings in sectors such as energy, financials and information technology. Rather than judging performance on the single variable of rising rates, investors should also consider sector earnings outlooks and risk appetite in the equity market.

This product can attract demand from investors seeking strategic equity exposure when the rate outlook is shifting. However, market participants' interest and trading conditions can change, so investors should check the bid-ask spread, trading volume and the gap to net asset value when buying and selling.

Its strength is rules-based equity exposure aimed at periods of rising rates, but in periods of falling rates or sector concentration it can deliver results that differ from broad indexes.

The FNDX ETF shown in the table builds a portfolio of US large-cap stocks on fundamental criteria, so it is better suited to comparing a broad large-cap style than rate sensitivity. The FNDX ETF and FNDA ETF carry relatively low cost burdens in the comparison table, while the PRF ETF offers a similar fundamental approach and the FNDA ETF provides small-cap exposure. The JHMM ETF is a mid-cap multifactor strategy with a relatively high cost burden, and the RECS ETF uses a core equity approach with a lower cost burden, so investors should compare the EQRR ETF with these products on whether they select for rate sensitivity, company size and cost burden together.

When reviewing the EQRR ETF, investors should look beyond a simple rate outlook and examine the index's rate-sensitive selection method, sector holdings and trading conditions together. The energy and financial exposure shown in official data may be affected differently depending on the economic cycle and commodity environment.

The EQRR ETF takes advantage of characteristics that are sensitive to rising rates, but when rates decline or the equity market as a whole is weak, the expected relative performance may not materialize. Energy prices, financial regulation, geopolitical variables and company-specific issues can also increase the volatility of its holdings.

The EQRR ETF can be considered by investors looking for a US large-cap strategy positioned for the possibility of rising rates. However, because its character differs from products that track broad indexes, investors should weigh the uncertainty of the rate outlook, sector exposure and trading conditions against the purpose of their own portfolio.