Why SPXU Is Poised to Keep Plunging
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the ProShares UltraPro Short S&P500 have received the dreaded one-star ranking.
With that in mind, let's take a closer look at SPXU, and see what CAPS investors are saying about the ETF right now.
Total Net Assets
Seeks daily investment results that correspond to three times the inverse (-3x) 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.
Year-to-Date / 1-Year / 3-Year Return
(30.5%) / (46.5%) / (42.9%)
ProShares Short S&P500
ProShares UltraShort QQQ
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 51% of the 459 members who have rated SPXU believe the ETF will underperform the S&P 500 going forward.
If there is anything other than a dramatic S&P plunge, this baby is basically mathematically guaranteed to underperform. Even with a long side-ways trend, expenses and volatility degradation will kill this sucker. This is just a short-term hold for people (read: suckers) that think they can time the market.
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The article Why SPXU Is Poised to Keep Plunging 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.