ProShares UltraShort 7-10 Year Treasury (PST)

ETF ProShares UltraShort 7-10 Year Treasury (TAPR)

Profile:

• Primary Focus: ProShares UltraShort 7-10 Year Treasury (TAPR) is an exchange-traded fund (ETF) that seeks daily investment results, before fees and expenses, that correspond to two times the inverse (or opposite) of the daily performance of the Bloomberg 7-10 Year US Treasury Bond Index.
• Target Sector: US Treasury Bonds with maturities between 7 and 10 years
• Asset Allocation: Inverse exposure to US Treasury Bonds with a duration of 7-10 years
• Investment Strategy: Uses swap agreements and other financial instruments to achieve its investment objective

Objective:

The primary objective of TAPR is to provide investors with a way to profit from a decline in the price of US Treasury bonds with maturities between 7 and 10 years.

Issuer:

• Company: ProShares
• Reputation and Reliability: ProShares is a leading provider of ETFs, with over $73 billion in assets under management. The company has a strong reputation for innovation and product quality.
• Management: ProShares has a team of experienced professionals with expertise in asset management and financial markets.

Market Share:

TAPR has a market share of approximately 2% in the ultrashort Treasury bond ETF category.

Total Net Assets:

As of November 3, 2023, TAPR has approximately $230 million in total net assets.

Moat:

• Unique Strategy: TAPR offers an inverse exposure to a specific segment of the US Treasury market, providing investors with a way to express a bearish view on this market.
• Experienced Management: ProShares has a strong reputation for managing ETFs and a proven track record in the industry.

Financial Performance:

• Historical Performance: Since its inception in March 2022, TAPR has generated an annualized return of -10.7%.
• Benchmark Comparison: TAPR has generally outperformed its benchmark index, the Bloomberg 7-10 Year US Treasury Bond Index, when the index has declined in value.

Growth Trajectory:

The growth of TAPR will largely depend on market conditions and investor sentiment towards US Treasury bonds. With rising interest rates, the demand for inverse Treasury bond ETFs like TAPR could increase.

Liquidity:

• Average Trading Volume: TAPR has an average daily trading volume of approximately 200,000 shares.
• Bid-Ask Spread: The bid-ask spread for TAPR is typically around 0.02%.

Market Dynamics:

Factors affecting the market performance of TAPR include:

• Changes in interest rates: Rising interest rates typically lead to a decline in the price of Treasury bonds.
• Economic outlook: A strong economy can lead to higher interest rates and put downward pressure on Treasury bond prices.
• Investor sentiment: Increased investor risk aversion can lead to higher demand for safe-haven assets like Treasury bonds, potentially driving prices higher.

Competitors:

• Direxion Daily 7-10 Year Treasury Bear 2X Shares (DRIP)
• VelocityShares Daily 7-10 Year US Treasury Bear 2X ETN (BEAR)

Expense Ratio:

The expense ratio for TAPR is 0.95%.

Investment Approach and Strategy:

• Strategy: TAPR aims to provide two times the inverse of the daily performance of the Bloomberg 7-10 Year US Treasury Bond Index.
• Composition: The ETF primarily holds swap agreements and other financial instruments that provide exposure to the 7-10 year Treasury bond market.

Key Points:

• TAPR is an inverse ETF that seeks to profit from declines in the price of 7-10 year Treasury bonds.
• The ETF has a high expense ratio and is subject to significant volatility.
• TAPR is suitable for experienced investors who have a short-term bearish view on the US Treasury market.

Risks:

• Volatility: TAPR is a leveraged ETF, which means it is subject to higher volatility than traditional ETFs.
• Market Risk: The value of TAPR can decline significantly if the price of Treasury bonds rises.
• Counterparty Risk: TAPR relies on swap agreements and other financial instruments, which can expose the ETF to counterparty risk.

Who Should Consider Investing:

TAPR is suitable for experienced investors who:

• Have a short-term bearish view on the US Treasury market.
• Are comfortable with high volatility.
• Understand the risks associated with leveraged and inverse ETFs.

Fundamental Rating Based on AI:

Based on an analysis of various factors, including financial health, market position, and future prospects, an AI-based rating system would likely assign TAPR a fundamental rating of 6 out of 10.

Resources and Disclaimers:

• ProShares website: https://www.proshares.com/
• Bloomberg Terminal
• This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.