1-Star ETFs Poised to Plunge: ProShares UltraShort S&P 500?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the ProShares UltraShort S&P500 has received the dreaded one-star ranking.
With that in mind, let's take a closer look at SDS, and see what CAPS investors are saying about the ETF right now.
Total Net Assets
Seeks daily investment results that correspond to two times the inverse (-2x) of the daily performance of the S&P 500. The index is a float-adjusted, market capitalization-weighted index of 500 U.S. operating companies and real estate investment trusts selected through a process that factors criteria such as liquidity, price, market capitalization and financial viability.
1-Year / 3-Year / 5-Year Returns
(28.7%) / (31.9%) / (25.8%)
Guggenheim Inverse 2x S&P 500
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 78% of the 443 All-Star members who have rated SDS believe the ETF will underperform the S&P 500 going forward.
Guaranteed to underperform in anything but a straight down market. The way these ultrashorts are set up, volatility means their returns will degrade over time, so even in a down market they can underperform (or at least not deliver their promised returns). Hold these for the long term at your own risk.
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The article 1-Star ETFs Poised to Plunge: ProShares UltraShort S&P 500? originally appeared on Fool.com.Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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