ProShares UltraShort Health Care (RXD)

Overview

ProShares UltraShort Health Care (RXD) seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the Dow Jones U.S. Health Care Index. It's a geared bearish bet on the health care sector.

Reputation and Reliability

ProShares is a well-known issuer of leveraged and inverse ETFs, with a solid track record for delivering on stated investment objectives.

Management Expertise

ProShares has a dedicated team with experience in managing complex investment strategies and leveraged ETFs.

Goal

To deliver two times the inverse (-2x) of the daily performance of the Dow Jones U.S. Health Care Index.

Investment Approach and Strategy

Strategy: RXD utilizes a leveraged inverse strategy, employing derivatives such as swaps to achieve its -2x daily target.

Composition The ETF holds derivatives contracts linked to the Dow Jones U.S. Health Care Index, rather than directly owning healthcare stocks.

Market Share: RXD's market share is small as this is a very niche ETF.

Total Net Assets (AUM): 34980719.53

Key Competitors

• None - Unique niche

Competitive Landscape

RXD operates in a niche market with very few direct competitors due to its specific leveraged inverse strategy focused on the health care sector. Its advantage lies in providing a tool for investors seeking to profit from short-term declines in health care stocks. The main disadvantage is the high risk due to leverage and the potential for rapid value erosion in rising markets. Due to the -2x leverage effect, the decay of this fund is fast and it is not suitable for long-term investment.

Historical Performance: Historical performance can vary significantly due to the leveraged and inverse nature of the fund. Past performance is not indicative of future results.

Benchmark Comparison: The ETF aims to deliver -2x the *daily* performance of the Dow Jones U.S. Health Care Index; tracking error is common for leveraged products over longer periods. Daily results should be compared to this index * -2.

Expense Ratio: 0.95

Average Trading Volume

The average daily trading volume is about 50,000 shares which indicates moderate liquidity.

Bid-Ask Spread

The typical bid-ask spread ranges between 0.10% and 0.20%, a moderate spread compared to the low average daily trading volume which affects liquidity.

Market Environment Factors

Performance is highly sensitive to news and events impacting the healthcare sector, including regulatory changes, drug approvals, and economic trends. A rising health care sector will rapidly diminish the value of RXD.

Growth Trajectory

RXD's growth potential is limited because it's designed for short-term tactical use, not long-term investing. Its strategy and holdings are consistently aimed at achieving its daily leveraged inverse target.

Competitive Edge

RXD's competitive advantage lies in its specialized -2x leveraged inverse exposure to the health care sector, catering to sophisticated investors seeking short-term hedging or speculative opportunities. It provides a readily accessible tool for implementing bearish views on the healthcare market. ProShares' experience in managing leveraged ETFs also provides a degree of credibility. It may be appropriate for only very short term investors who have very specific bearish views on the Healthcare industry.

Volatility

RXD exhibits high volatility due to its leveraged nature and the inherent volatility of the health care sector.

Market Risk

RXD is subject to significant market risk, particularly related to fluctuations in the health care sector. Due to the -2x leverage effect, the decay of this fund is fast and it is not suitable for long-term investment.

Ideal Investor Profile

RXD is suitable for sophisticated investors with a high-risk tolerance who have a short-term bearish outlook on the health care sector and understand the risks associated with leveraged and inverse ETFs.

Market Risk

RXD is best suited for active traders seeking short-term tactical opportunities, not long-term investors or passive index followers.

ProShares UltraShort Health Care (RXD) is a niche ETF designed for short-term trading, offering -2x leveraged inverse exposure to the Dow Jones U.S. Health Care Index. Its high volatility and complex structure make it suitable only for sophisticated investors with a bearish outlook on the healthcare sector. Due to the -2x leverage effect, the decay of this fund is fast and it is not suitable for long-term investment. Its performance is significantly affected by market events within the healthcare industry, and it carries substantial risks due to its leveraged nature.

Data Sources:

• ProShares website
• ETF.com
• Yahoo Finance

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Investment decisions should be based on thorough research and consultation with a qualified financial advisor. Leveraged and inverse ETFs carry significant risks and may not be suitable for all investors.