A pair of exchange-traded funds offering the first direct access to the S&P Case-Shiller Composite-10 Home Prices Index is set to launch on April 27, according to new filings with the Securities and Exchange Commission.

The MacroShares Major Metro Housing Up and the MacroShares Major Metro Housing Down ETFs will trade on the New York Stock Exchange's Arca platform. The long version will go under the ticker "UMM" while the short-positioned ETF will be marketed under the "DMM" symbol.

The funds aim to provide 300% and -300% of the returns of the benchmark index, which is one of the most closely followed benchmarks of residential housing prices.

Fact sheets submitted by the funds' adviser, MarcoMarkets LLC, to the SEC on April 7 specified the launch date. Calls to the company requesting comment about the impending launches weren't returned.

The fact sheets noted that each fund would come with an expense ratio of 1.25%. In addition, the filings provided new details regarding the funds' allocations as represented by their underlying benchmarks. At inception, the S&P Case-Shiller Composite-10 Home Prices Index composition is expected to appear as follows:

• New York at 27.2%

• Los Angeles at 21.2%

• San Francisco at 11.8%

• Chicago at 8.9%

• Washington, D.C., at 7.8%

• Boston at 7.4%

• San Diego at 5.5%

• Miami at 5%

• Denver at 3.7%

• Las Vegas at 1.5%

Interestingly enough, the fact sheet also lists correlations to other major asset classes. The highest is stated as REITs at 0.34. Stocks are at 0.08 and commodities 0.17. (Of course, 1.0 would be a perfect correlation; 0.00 is uncorrelated.)

How They Work

Much like earlier versions of MacroShares, the new ETFs will have an "up" and a "down" version, embracing what is commonly referred to as the MacroShares "teeter-totter" structure. Under this structure, the new ETFs are offered in equal numbers of up and down shares. This paired structure is what allows the MacroShares to be tied to illiquid markets like housing.

The only asset the ETFs hold is Treasuries. Those Treasuries are simply shifted from one fund to another depending on the price point of the index. If home prices go up, assets are shifted from the Down Macro to the Up Macro, and vice versa.

Because they hold Treasuries, the new funds also provide income: Both the Up and Down Macros earn interest income, which should add about 4% to annual returns at current interest rates.

There are a few quirks.

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