ProShares Ultra Russell2000 (UWM)

Overview

ProShares Ultra Russell2000 (UWM) seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the Russell 2000u00ae Index. It's designed for investors seeking amplified exposure to small-cap stocks.

Reputation and Reliability

ProShares is a well-known issuer of leveraged and inverse ETFs, with a solid track record of providing products that track their stated objectives, though these objectives are short-term.

Management Expertise

ProShares has a dedicated team experienced in managing leveraged ETFs and using derivatives to achieve the desired exposure.

Goal

To provide daily investment results, before fees and expenses, corresponding to two times (2x) the daily performance of the Russell 2000u00ae Index.

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy, using financial instruments such as swap agreements to magnify the daily performance of the Russell 2000 Index.

Composition The ETF primarily utilizes derivatives, such as swaps, to gain leveraged exposure to the Russell 2000 Index. It also holds cash and cash equivalents.

Market Share: UWM's market share within the leveraged small-cap ETF space is significant, although it is not the only option for investors seeking this type of exposure.

Total Net Assets (AUM): 613856352

Key Competitors

• Direxion Daily Small Cap Bull 3X Shares (TNA)
• ProShares UltraPro Russell2000 (URTY)

Competitive Landscape

The leveraged small-cap ETF market is relatively concentrated. UWM competes primarily with other leveraged ETFs like TNA and URTY. UWM's 2x leverage offers a different risk/reward profile compared to TNA's 3x leverage, and URTY also offers a 3x leveraged exposure but targets a different risk profile. UWM's advantage lies in its established presence and its 2x leverage, which may be preferred by some investors seeking less extreme daily movements.

Historical Performance: Historical performance data is highly variable due to the leveraged nature of the ETF. Investors should consult fund fact sheets for specific returns over different time periods. Performance data is not static.

Benchmark Comparison: The ETF aims to achieve twice the *daily* return of the Russell 2000. Due to compounding, the long-term performance may deviate significantly from 2x the index's performance.

Expense Ratio: 0.95

Average Trading Volume

UWM exhibits a relatively high average daily trading volume, indicating good liquidity for investors.

Bid-Ask Spread

The bid-ask spread is typically reasonable, which allows investors to efficiently trade the ETF without incurring excessive transaction costs.

Market Environment Factors

UWM's performance is heavily influenced by the performance of small-cap stocks and overall market sentiment. Economic growth, interest rate changes, and investor risk appetite all play a significant role.

Growth Trajectory

The growth trajectory of UWM is directly tied to the performance of the Russell 2000 and investor demand for leveraged small-cap exposure. Changes in its strategy are infrequent, as it primarily seeks to maintain its 2x leverage.

Competitive Edge

UWM's competitive advantage lies in its established presence as a provider of leveraged Russell 2000 exposure and its 2x leverage factor, which provides a balance between risk and reward. This allows it to be potentially less volatile compared to higher leverage products. The ETF benefits from ProShares' experience in managing leveraged and inverse funds. UWM is a well-known and understood product within its niche, which allows it to easily be recognized among investment opportunities.

Volatility

UWM exhibits significantly higher volatility than a non-leveraged Russell 2000 ETF due to its 2x leverage factor. Investors should expect substantial price swings.

Market Risk

UWM is subject to the market risk associated with small-cap stocks, which can be more volatile than large-cap stocks. Its leveraged nature further amplifies this risk, meaning both gains and losses are magnified.

Ideal Investor Profile

UWM is suitable for sophisticated investors with a high-risk tolerance who seek short-term leveraged exposure to the Russell 2000. It is not appropriate for buy-and-hold investors.

Market Risk

UWM is best suited for active traders who understand the risks and complexities of leveraged ETFs and use them for short-term tactical positions. It is not suitable for long-term investing due to the effects of compounding.

ProShares Ultra Russell2000 (UWM) is a leveraged ETF designed to provide two times the *daily* performance of the Russell 2000 Index. It is a high-risk, high-reward investment suitable only for sophisticated traders with a short-term focus. Due to compounding, it is not suitable for long-term buy-and-hold strategies. The ETF's performance is heavily influenced by small-cap market dynamics and carries significant volatility. UWM can be a valuable tool for active traders seeking amplified daily exposure to small-cap stocks but it is very risky.

Data Sources:

• ProShares website
• SEC filings
• Various financial news sources

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investing in leveraged ETFs involves significant risks, including the potential for substantial losses. Investors should carefully consider their investment objectives and risk tolerance before investing in UWM.