PROSHARES ULTRASHORT RUSSELL 2000 GROWTH (SKK)

Overview

The ProShares UltraShort Russell2000 Growth (SKK) seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the Russell 2000 Growth Index. It provides leveraged inverse exposure to small-cap growth stocks, aiming to profit from declines in the index.

Reputation and Reliability

ProShares is a well-known issuer of leveraged and inverse ETFs, with a proven track record in providing specialized investment products.

Management Expertise

ProShares has a dedicated team of portfolio managers and investment professionals experienced in managing complex ETF strategies.

Goal

To seek daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the Russell 2000 Growth Index.

Investment Approach and Strategy

Strategy: Inverse leveraged ETF; aims to deliver -2x the daily performance of the Russell 2000 Growth Index using derivatives.

Composition Primarily utilizes derivatives, such as swaps, futures contracts, and options, to achieve its leveraged inverse exposure. Does not hold stocks.

Market Share: The market share for inverse leveraged ETFs focusing on small cap growth is very small, the total AUM for these types of funds is low.

Total Net Assets (AUM): 24270781

Key Competitors

• DRV
• SRTY

Competitive Landscape

The competitive landscape is characterized by a few specialized inverse and leveraged ETFs. SKK differentiates itself by focusing specifically on the Russell 2000 Growth Index with a -2x leverage factor. A disadvantage of SKK is the erosion of value due to daily resetting of leveraged positions, especially in volatile markets. Competitors offer different indices or leverage factors and some offer long ETFs as well.

Historical Performance: Due to the nature of leveraged and inverse ETFs, long-term historical performance is not indicative of future results. It's designed for short-term trading.

Benchmark Comparison: The ETF's performance should be compared to -2x the daily performance of the Russell 2000 Growth Index. Due to compounding effects, longer periods diverge significantly.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume of SKK is approximately 250,000 shares per day which indicates moderately high liquidity.

Bid-Ask Spread

The bid-ask spread typically ranges from $0.02 to $0.05, varying with market conditions.

Market Environment Factors

Economic indicators, interest rate changes, and investor sentiment towards small-cap growth stocks significantly influence SKK. Uncertainty in economic growth often benefits inverse funds like SKK.

Growth Trajectory

The growth trajectory of SKK is tied to the performance of the Russell 2000 Growth Index; increased short-term volatility leads to higher trading volume.

Competitive Edge

SKK's advantage lies in its specific focus on the Russell 2000 Growth Index with -2x leverage. It offers a targeted way for sophisticated investors to express a bearish view on small-cap growth stocks. ProShares' experience in managing leveraged and inverse ETFs provides an added layer of expertise. The product may experience return erosion due to its daily reset feature if the price of underlying asset fluctuates greatly in one day.

Volatility

SKK exhibits high volatility due to its leveraged nature, making it unsuitable for risk-averse investors. High volatility increases both the chance for greater gains and greater losses.

Market Risk

The primary market risk is tied to the performance of the Russell 2000 Growth Index. Changes in market sentiment or economic conditions can significantly impact the fund.

Ideal Investor Profile

Sophisticated traders and investors with a high-risk tolerance, seeking short-term exposure to the inverse performance of the Russell 2000 Growth Index.

Market Risk

Best suited for active traders with a short-term investment horizon, not for long-term investors or passive index followers.

ProShares UltraShort Russell2000 Growth (SKK) is a leveraged inverse ETF designed for short-term trading, providing -2x the daily performance of the Russell 2000 Growth Index. Due to its leveraged nature, it is highly volatile and only appropriate for sophisticated traders with a bearish outlook on small-cap growth stocks. The ETF's performance is significantly affected by market volatility and economic conditions. It is not recommended for long-term investors due to its daily resetting nature and return erosion.

Data Sources:

• ProShares website
• ETF.com
• Yahoo Finance

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Investing in leveraged and inverse ETFs carries significant risk.