ProShares UltraShort MidCap400 (MZZ)

Overview

ProShares UltraShort MidCap400 (SMK) seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the S&P MidCap 400 Index. It offers leveraged inverse exposure to mid-cap U.S. stocks.

Reputation and Reliability

ProShares is a well-established issuer known for its leveraged and inverse ETFs. They have a proven track record, but these products are complex and require careful understanding.

Management Expertise

ProShares has a dedicated team with expertise in managing leveraged and inverse ETFs, requiring continuous monitoring and adjustments.

Goal

To achieve daily investment results that correspond to two times the inverse (-2x) of the daily performance of the S&P MidCap 400 Index.

Investment Approach and Strategy

Strategy: The ETF employs a leveraged inverse strategy, using financial instruments to amplify and invert the daily returns of the S&P MidCap 400 Index.

Composition The ETF primarily holds financial instruments such as swap agreements, futures contracts, and money market instruments designed to create leveraged inverse exposure.

Market Share: SMKu2019s market share is niche, within the leveraged inverse mid-cap ETF category.

Total Net Assets (AUM): 26640389.59

Key Competitors

• ProShares Short MidCap400 (MYY)
• Direxion Daily Mid Cap Bear 3X Shares (MIDZ)

Competitive Landscape

The leveraged inverse ETF market is competitive, with a few major players. SMK benefits from ProShares' reputation, but its leveraged nature introduces higher risk. MYY offers non-leveraged inverse exposure, a lower-risk choice. MIDZ provides higher leveraged inverse exposure.

Historical Performance: Historical performance is highly dependent on the daily movements of the S&P MidCap 400 Index and can vary significantly.

Benchmark Comparison: The ETF is designed to provide -2x the daily return of the S&P MidCap 400 Index. It's crucial to compare daily returns, not long-term performance, with the index's inverse.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume indicates moderate liquidity and ease of trading.

Bid-Ask Spread

The bid-ask spread reflects the cost of trading and can fluctuate depending on market conditions.

Market Environment Factors

Economic indicators, interest rates, and overall market sentiment significantly impact the ETFu2019s performance due to its inverse and leveraged nature.

Growth Trajectory

The growth trajectory of SMK is tied to investor demand for hedging or speculation against mid-cap stock performance. Changes in interest rates and derivative market conditions also affect returns.

Competitive Edge

ProShares UltraShort MidCap400's advantages lies in its specific focus on providing a leveraged inverse exposure to the S&P MidCap 400 Index. The daily reset minimizes the compounding risk, making it more suitable for short-term strategies. This focus makes it a precise tool for investors seeking to profit from short-term declines in mid-cap stocks. Its structure provides a unique offering, catering to sophisticated investors with short time horizons and a clear understanding of leveraged instruments.

Volatility

The ETF exhibits high volatility due to its leveraged inverse nature; daily returns are amplified, both positively and negatively.

Market Risk

The primary market risk is the potential for significant losses if the S&P MidCap 400 Index rises, due to the inverse relationship and leverage.

Ideal Investor Profile

The ideal investor is a sophisticated trader with a short-term investment horizon who understands the risks associated with leveraged and inverse ETFs and seeks to profit from short-term declines in mid-cap stocks.

Market Risk

This ETF is suited for active traders who closely monitor market movements and can manage the high risks associated with daily leveraged inverse strategies. Not appropriate for long-term investors or passive index followers.

ProShares UltraShort MidCap400 (SMK) is a leveraged inverse ETF designed for sophisticated traders who want to bet against mid-cap stocks on a daily basis. It uses financial instruments to deliver -2x the daily return of the S&P MidCap 400 Index. Due to its leverage and daily reset, it's highly volatile and not suitable for long-term holdings. Investors must fully understand the risks of compounding, daily resets, and potential losses when using SMK. Its unique position and daily approach sets it apart in the leveraged inverse ETF market.

Data Sources:

• ProShares website
• ETF.com
• SEC Filings

Disclaimers:

This data is for informational purposes only and does not constitute financial advice. Investing in leveraged and inverse ETFs involves significant risk of loss. Consult with a qualified financial advisor before making any investment decisions.