What Is ProShares?

ProShares is a division of ProFunds Group that manages various investment funds with combined assets under management of around $58 billion. This makes it a small investment company compared to other giant asset managers that manage much more. Nonetheless, ProShares offers unique funds that track various indices and asset classes.

The company offers dozens of exchange traded fund (ETF) products, all designed to perform specific speculative investment strategies. Short ProShares are inverse ETFs that move opposite to the market, while Ultra ProShares is a family of leveraged ETFs that amplify market performance by a factor of two or three.

Key Takeaways

  • ProShares offers a range of pooled investments, specializing in ETF products.
  • ProShares includes over 140 different products, including leveraged and inverse ETFs, with one of its most popular products being the Ultra S&P 500 that seeks double the return of the S&P 500.
  • ProShares also offers smart beta strategies, a blend of active and passive investing that tries to accentuate the benefits of both investment styles.

Understanding ProShares

ProShares has been at the forefront of the ETF revolution since 2006 and now offers one of the largest lineups of ETFs. The company is a leader in strategies such as dividend growth, interest rate hedged bond, and geared (leveraged and inverse) ETF investing. ProShares continues to innovate with products that provide strategic and tactical opportunities for investors to manage risk and enhance returns.

ProShares' lineup of funds includes equities, fixed income, alternative, and volatility. The company puts a twist on these investments by offering both leveraged ETFs and inverse funds. By combining low fees with tax efficiency in an asset that tracks an index, ETFs can build greater longer-term savings than a comparable mutual fund. Beyond savings, most ETFs aim to match the performance of a benchmark index, meaning less frequent turnover within the fund and thus lower fees.

Leveraged ETFs seek to return a multiple of two or three relative to the actual performance of the asset or index being tracked to amplify daily or monthly returns, which can boost both returns and potential losses.

ProShares Offerings

ProShares offers over 140 different products across different asset classes, sectors, and market segments. Products grounded in asset classes seek to track the investment progress of equities, fixed income, commodities, and real estate, whereas sectors that observe different industries and market segments follow emerging and developing markets as well as individual countries in Europe and Asia.

ProShares ETFs also employ popular smart beta strategies like dividend growth to capture greater risk-adjusted returns than traditional market-cap indexes.

The ProShares Trust Ultra VIX Short-Term Futures ETF (UVXY) is a popular product offered by ProShares. This fund seeks to double the daily performance of the S&P 500 VIX Short-Term Futures Index. It provides leverage exposure to the most followed volatility index.

Another example of a popular ProShares fund is the Ultra S&P 500 (SSO). One of the first products offered by ProShares, this fund attempts to double the returns of the S&P 500 Index for a single day, as measured from sequential NAV calculations. The ProShares Ultra Short S&P 500 (SPXU) is a leveraged ETF that aims at a return that is three times the inverse of the daily performance of the S&P 500 Index.