ProShares Decline of the Retail Store ETF (EMTY)

Overview

The ProShares Decline of the Retail Store ETF (EMTY) is an inverse ETF designed to profit from the decline of brick-and-mortar retail stores. It seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the Solactive-ProShares Bricks and Mortar Retail Store Index.

Reputation and Reliability

ProShares is a well-known issuer specializing in leveraged and inverse ETFs. They are generally considered reliable but their complex products require careful understanding.

Management Expertise

ProShares has extensive experience in managing inverse and leveraged ETFs, requiring specialized expertise in derivatives and hedging strategies.

Goal

The ETF aims to deliver the inverse of the daily performance of the Solactive-ProShares Bricks and Mortar Retail Store Index.

Investment Approach and Strategy

Strategy: The ETF employs a derivatives-based strategy, primarily using swap agreements, to achieve its inverse daily objective.

Composition The ETF's assets primarily consist of swap agreements and other derivative instruments designed to provide inverse exposure to the underlying retail index. It may also hold cash or cash equivalents.

Market Share: EMTY's market share is difficult to determine precisely as inverse ETFs often serve specific tactical purposes rather than long-term core holdings.

Total Net Assets (AUM): 6580000

Key Competitors

Competitive Landscape

EMTY operates in a niche market focused on inverse exposure to retail. Due to its unique inverse strategy, direct competitors are limited. Its advantage is providing a tool for short-term bearish views on retail, while its disadvantage lies in the decay associated with daily rebalancing which leads to underperformance over long holding periods compared to the inverse of the underlying index's performance.

Historical Performance: Historical performance can be highly variable due to the inverse and daily rebalancing nature of the ETF. Long-term performance is generally negative due to the effects of compounding.

Benchmark Comparison: Due to the daily reset, direct comparison to a static benchmark is less relevant than assessing how well it tracks the *inverse* daily returns of the underlying Solactive-ProShares Bricks and Mortar Retail Store Index.

Expense Ratio: 0.95

Average Trading Volume

The average daily trading volume for EMTY is relatively low, potentially leading to wider bid-ask spreads.

Bid-Ask Spread

The bid-ask spread can be relatively wide due to the low trading volume and the complexity of the ETF's structure, increasing transaction costs.

Market Environment Factors

Economic indicators, consumer spending trends, e-commerce growth, and interest rate changes all influence the performance of retail stocks and, therefore, the inverse performance of EMTY.

Growth Trajectory

EMTY's growth trajectory is largely dependent on investor sentiment towards the retail sector and the demand for inverse exposure. Changes in retail landscape (e.g., bankruptcies, acquisitions) influence its strategy and holdings.

Competitive Edge

EMTY's competitive edge lies in its focused approach to providing inverse exposure specifically to brick-and-mortar retail stocks. It offers a convenient tool for investors seeking to profit from the decline of this sector. However, the daily rebalancing and associated decay make it unsuitable for long-term holding. ProShares' brand recognition and expertise in inverse ETFs also contribute to its appeal.

Volatility

EMTY exhibits high volatility due to its inverse nature and daily rebalancing. The ETF is subject to volatility decay, which can erode long-term returns even if the underlying index moves in the anticipated direction.

Market Risk

The primary market risk stems from the potential for the retail sector to outperform expectations, resulting in losses for EMTY. Additionally, the use of derivatives introduces counterparty risk and the potential for mispricing.

Ideal Investor Profile

EMTY is suitable for sophisticated investors with a short-term, bearish outlook on the brick-and-mortar retail sector. It is not appropriate for buy-and-hold investors or those with limited understanding of inverse ETFs.

Market Risk

EMTY is best suited for active traders who use it for short-term tactical positions. It is not suitable for long-term investors or passive index followers.

The ProShares Decline of the Retail Store ETF (EMTY) is an inverse ETF designed to profit from the decline of brick-and-mortar retail stocks. It uses derivatives to deliver the inverse of the daily performance of the Solactive-ProShares Bricks and Mortar Retail Store Index. Due to its daily rebalancing and volatility decay, it's designed for short-term tactical use by sophisticated investors with a bearish view on the retail sector. EMTY exhibits high volatility and is not suitable for long-term investment strategies.

Data Sources:

• ProShares website
• ETF.com
• Yahoo Finance

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Investing in ETFs involves risk, including the potential loss of principal. Inverse ETFs are complex instruments and are not suitable for all investors. Consult with a qualified financial advisor before making any investment decisions.