ProShares UltraPro Short Russell2000 (SRTY)

Overview

The ProShares UltraPro Short Russell2000 (SRTY) is a leveraged ETF that seeks daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the Russell 2000 Index. It provides a way to profit from a decline in small-cap stocks.

Reputation and Reliability

ProShares is a well-known issuer of leveraged and inverse ETFs, recognized for its expertise in these specialized products.

Management Expertise

ProShares has a team of experienced professionals specializing in managing complex ETFs like leveraged and inverse funds.

Goal

To seek daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the Russell 2000 Index.

Investment Approach and Strategy

Strategy: The ETF uses a combination of swaps, futures contracts, and other derivative instruments to achieve its -3x leveraged inverse return objective relative to the Russell 2000 Index.

Composition The ETF primarily holds derivatives that provide leveraged inverse exposure to the Russell 2000 Index.

Market Share: SRTY's market share is difficult to define precisely without proprietary data, but it is a leading leveraged inverse ETF targeting the Russell 2000.

Total Net Assets (AUM): 60660000

Key Competitors

• ProShares Short Russell2000 (RWM)
• Direxion Daily Small Cap Bear 3X Shares (TZA)
• Small Cap (SBB)

Competitive Landscape

The competitive landscape includes other inverse and leveraged ETFs targeting the Russell 2000 or similar small-cap indices. SRTY offers a higher level of leverage (-3x), which can lead to greater potential gains or losses compared to its competitors. The effectiveness of each ETF depends on the specific market conditions and the investor's risk tolerance.

Historical Performance: Historical performance is highly dependent on the daily movements of the Russell 2000. Due to its leveraged nature, performance can be significantly amplified in both positive and negative directions. Long-term performance is typically negative due to the effects of compounding in volatile markets.

Benchmark Comparison: The ETF's performance aims to be -3x the daily performance of the Russell 2000. However, due to the daily reset, its performance over longer periods will deviate from -3x the cumulative performance of the index.

Expense Ratio: 0.95

Average Trading Volume

SRTY generally has moderate to high average trading volume, enhancing its liquidity.

Bid-Ask Spread

The bid-ask spread for SRTY is typically reasonable, but it can widen during periods of high volatility or low trading volume.

Market Environment Factors

Economic indicators, interest rate changes, and investor sentiment towards small-cap stocks significantly influence SRTY's performance. Overall market volatility and trends in the Russell 2000 directly impact the ETF.

Growth Trajectory

The ETF's growth trajectory depends on the demand for inverse and leveraged products, particularly during periods of market uncertainty or anticipated declines in small-cap stocks. Strategy remains consistent; holdings are adjusted to maintain the target leverage ratio.

Competitive Edge

SRTY's main advantage is its high leverage (-3x) providing significant exposure to the inverse of the Russell 2000's daily performance, appealing to aggressive traders. The ProShares brand is also a competitive advantage as the issuer is well-known for providing these niche products. This specific level of inverse leverage is not widely replicated. However, the high leverage also makes it riskier for long-term holding or passive investing.

Volatility

SRTY is a highly volatile ETF due to its leveraged nature. Its daily returns are significantly amplified compared to the Russell 2000.

Market Risk

The primary market risk is the potential for substantial losses if the Russell 2000 rises, as SRTY is designed to profit from declines. The daily reset feature can also lead to erosion of value over time, especially in volatile or sideways markets.

Ideal Investor Profile

SRTY is suitable for sophisticated investors and active traders who have a strong understanding of leveraged ETFs and are seeking short-term exposure to the inverse of the Russell 2000. It is not appropriate for buy-and-hold investors.

Market Risk

SRTY is best suited for active traders with a short-term trading horizon and a high-risk tolerance. It is not suitable for long-term investors or passive index followers.

ProShares UltraPro Short Russell2000 (SRTY) is a leveraged inverse ETF designed for sophisticated traders seeking short-term profit from declines in the Russell 2000. Due to its -3x leverage, it is inherently risky and not suitable for long-term investments. Performance is directly tied to the daily movements of the Russell 2000, amplified in the opposite direction. Investors should carefully consider the risks and potential for losses before investing in SRTY.

Data Sources:

• ProShares.com
• ETF.com
• Yahoo Finance

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Investing in leveraged ETFs involves significant risks, including the potential for substantial losses. Consult with a financial advisor before making any investment decisions.