ProShares UltraShort Consumer Services (SCC)

Overview

ProShares UltraShort Consumer Services (SCC) 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. Consumer Services Index. It provides leveraged exposure to the inverse performance of U.S. consumer services companies.

Reputation and Reliability

ProShares is a well-known issuer of leveraged and inverse ETFs with a long track record in the market.

Management Expertise

ProShares has a dedicated team of investment professionals experienced in managing leveraged and inverse ETFs.

Goal

To seek 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. Consumer Services Index.

Investment Approach and Strategy

Strategy: The ETF uses derivatives, such as swap agreements, to achieve its -2x daily leveraged inverse objective.

Composition The ETF's holdings primarily consist of swap agreements and other derivative instruments designed to deliver the target leveraged inverse exposure.

Market Share: SCC has a relatively small market share within the leveraged/inverse ETF space, specifically focusing on the consumer services sector.

Total Net Assets (AUM): 17.2

Key Competitors

• ProShares Ultra Consumer Discretionary (UCD)
• Direxion Daily Retail Bear 3X ETF (RETS)
• ProShares Short Consumer Services (SZK)

Competitive Landscape

The competitive landscape includes other leveraged and inverse ETFs focused on broader consumer sectors or specific retail segments. SCC differentiates itself with its focus on the Dow Jones U.S. Consumer Services Index, offering a narrower exposure. However, its leveraged nature and associated risks may deter some investors compared to non-leveraged options. The ETF is at a disadvantage if the index does not move as anticipated.

Historical Performance: Performance data is highly dependent on the daily performance of the Dow Jones U.S. Consumer Services Index and the impact of compounding. Due to the leverage and inverse nature, long-term performance is unlikely to mirror the index's opposite return.

Benchmark Comparison: The ETF aims to provide -2x the *daily* performance of the Dow Jones U.S. Consumer Services Index. Long-term performance will likely deviate significantly due to compounding effects.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume is moderate, affecting the ability to buy or sell large positions without impacting the price.

Bid-Ask Spread

The bid-ask spread can be relatively wide, reflecting the leveraged nature and potentially lower trading volume, increasing the cost of trading.

Market Environment Factors

Consumer spending, economic growth, interest rates, and market sentiment heavily influence the consumer services sector and, consequently, SCC's performance.

Growth Trajectory

SCC's growth trajectory is directly tied to investor demand for short-term, leveraged inverse exposure to the consumer services sector. There are no foreseeable changes to strategy and holdings.

Competitive Edge

SCC's competitive advantage lies in its offering of a leveraged inverse exposure specifically to the Dow Jones U.S. Consumer Services Index, catering to investors with a short-term bearish view. The -2x leverage provides amplified returns (or losses) compared to non-leveraged inverse ETFs. This niche focus, along with ProShares' reputation, may attract a specific investor base. However, it faces challenges of increased volatility due to the leveraged nature and the risk of compounding over time, which might lead to vastly different returns than intended.

Volatility

SCC is inherently volatile due to its leveraged and inverse nature, leading to significant price fluctuations.

Market Risk

The ETF is exposed to market risk associated with the consumer services sector, as well as the risks associated with leveraged and inverse strategies, including the potential for amplified losses and the effects of compounding.

Ideal Investor Profile

The ideal investor is a sophisticated, active trader with a short-term bearish outlook on the consumer services sector and a strong understanding of leveraged and inverse ETFs and associated risks.

Market Risk

SCC is best suited for active traders seeking short-term tactical exposure and is not appropriate for long-term investors or passive index followers.

ProShares UltraShort Consumer Services (SCC) offers leveraged inverse exposure to the Dow Jones U.S. Consumer Services Index, targeting sophisticated traders with a bearish outlook. Its -2x leverage amplifies daily returns (or losses), making it a high-risk, short-term trading instrument. Long-term investment is discouraged due to compounding effects and increased volatility. The ETF's performance depends heavily on the index's daily movements and market conditions affecting consumer services companies.

Data Sources:

• ProShares website
• ETF.com
• Yahoo Finance

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. Leveraged and inverse ETFs are high-risk investments.