ProShares UltraShort Health Care (RXD)

Overview

ProShares UltraShort Health Care (RXD) seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the Dow Jones U.S. Health Care Index. It's designed for investors seeking to profit from a short-term decline in the health care sector.

Reputation and Reliability

ProShares is a well-known issuer of leveraged and inverse ETFs, recognized for innovation and providing specialized investment tools.

Management Expertise

ProShares has a dedicated team with expertise in managing leveraged and inverse ETFs, requiring advanced risk management and trading strategies.

Goal

To provide daily investment results (before fees and expenses) that correspond to two times the inverse (-2x) of the daily performance of the Dow Jones U.S. Health Care Index.

Investment Approach and Strategy

Strategy: RXD employs a leveraged inverse strategy, seeking to achieve -2x the daily performance of the Dow Jones U.S. Health Care Index using derivatives such as swaps and futures contracts.

Composition The ETF primarily holds derivative instruments (swaps, futures) on the Dow Jones U.S. Health Care Index to achieve its leveraged inverse exposure.

Market Share: RXD holds a relatively small market share within the broader healthcare ETF landscape, given its inverse leveraged nature.

Total Net Assets (AUM): 39680000

Key Competitors

• IXJ
• XLV
• VHT
• FHLC

Competitive Landscape

The healthcare ETF industry is dominated by large, passively managed ETFs like XLV and VHT. RXD differentiates itself through its leveraged inverse strategy, appealing to traders seeking short-term profits from declining healthcare stock prices. RXD's leveraged nature makes it riskier and less suitable for long-term investors compared to its competitors.

Historical Performance: Historical performance is highly dependent on the short-term movements of the Dow Jones U.S. Health Care Index. Due to its leveraged inverse nature, long-term performance is generally negative due to the effects of compounding.

Benchmark Comparison: RXD's performance should be compared to -2x the daily performance of the Dow Jones U.S. Health Care Index. It's designed to inversely correlate with the benchmark on a daily basis, but long-term tracking can deviate significantly.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume for RXD is moderate, allowing for relatively easy entry and exit for most traders.

Bid-Ask Spread

The bid-ask spread can be wider than more liquid, non-leveraged ETFs, which can impact trading costs.

Market Environment Factors

RXD is affected by factors impacting the healthcare sector, including regulatory changes, drug pricing debates, technological advancements, and overall market sentiment. Economic indicators, interest rate fluctuations, and global health crises can also influence its performance.

Growth Trajectory

RXD's growth is not tied to a positive trend; its strategy is designed to profit from declines in the healthcare sector. Changes to the underlying index methodology or the ETF's leverage factor could impact its performance.

Competitive Edge

RXD's competitive advantage lies in its unique leveraged inverse exposure to the healthcare sector. It provides a tool for sophisticated traders to express bearish views on healthcare stocks. Its specialized nature differentiates it from broad-based healthcare ETFs. However, its leveraged nature also increases its risk and complexity compared to unleveraged alternatives.

Volatility

RXD exhibits high volatility due to its leveraged nature. Daily returns can be significantly amplified, both positively and negatively.

Market Risk

RXD is subject to market risk associated with the healthcare sector, as well as the risk of leverage. Inverse ETFs can suffer significant losses if the underlying index rises, especially over longer periods.

Ideal Investor Profile

RXD is suitable for sophisticated traders with a strong understanding of leveraged and inverse ETFs and a short-term bearish outlook on the healthcare sector.

Market Risk

RXD is best suited for active traders with a short-term investment horizon. It's not recommended for long-term investors or passive index followers due to its leveraged inverse structure and potential for significant value erosion over time.

ProShares UltraShort Health Care (RXD) is a leveraged inverse ETF designed for sophisticated traders seeking to profit from short-term declines in the healthcare sector. It offers -2x daily exposure to the Dow Jones U.S. Health Care Index. Due to its leveraged nature, it is highly volatile and is not suitable for long-term investment. Its performance is greatly influenced by the daily movements of the underlying index and can be negatively impacted by compounding effects over time. This ETF requires careful monitoring and a deep understanding of its risks.

Data Sources:

• ProShares website
• ETF.com
• Bloomberg
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Leveraged and inverse ETFs are complex investment vehicles and involve significant risks. Investors should carefully consider their investment objectives and risk tolerance before investing.