ProShares UltraShort Basic Materials (SMN)

ProShares UltraShort Basic Materials (SMN)

Profile:

ProShares UltraShort Basic Materials (SMN) is an exchange-traded fund (ETF) that seeks daily investment results, before fees and expenses, that correspond to the inverse of twice (2x) the daily performance of the Dow Jones U.S. Basic Materials Index.

This means that SMN aims to deliver inverse double the daily performance of the Dow Jones U.S. Basic Materials Index. The index tracks the performance of publicly traded companies in the basic materials sector within the U.S. This includes companies involved in industries like mining, chemicals, and construction materials.

Objective:

The primary investment goal of SMN is to short-term traders who want to profit from a decline in the Dow Jones U.S. Basic Materials Index. It's important to note that SMN is designed for short-term trading and not for long-term investors.

Issuer:

ProShares is the issuer of SMN. ProShares is a leading provider of ETFs, with over $80 billion in assets under management.

Reputation and Reliability:

ProShares has a strong reputation in the ETF industry. The company has been recognized for its innovative products and its commitment to investor education.

Management:

The ProShares management team has extensive experience in the financial industry. The team includes experts in portfolio management, index construction, and ETF development.

Market Share:

SMN has a market share of 2.82% in the inverse basic materials sector.

Total Net Assets:

SMN has $313.87 million in total net assets.

Moat:

SMN's key competitive advantages include its:

• Unique strategy: Inverse leveraged exposure to the basic materials sector.
• Liquidity: High trading volume.
• Cost-effectiveness: Low expense ratio.

Financial Performance:

SMN has delivered negative returns over the past year (-34.75%), three years (-71.56%), and five years (-135.55%). However, it's important to remember that SMN is designed for short-term trading and not for long-term investing.

Benchmark Comparison:

SMN has underperformed its benchmark index, the Dow Jones U.S. Basic Materials Index, over the past year (-34.75% vs. -13.86%). This is due to the leveraged nature of the ETF.

Growth Trajectory:

The future performance of SMN will depend on the performance of the underlying index. If the index declines, SMN is expected to generate positive returns. Conversely, if the index rises, SMN is expected to generate negative returns.

Liquidity:

SMN has an average daily trading volume of 5.42 million shares.

Bid-Ask Spread:

The bid-ask spread for SMN is 0.06%.

Market Dynamics:

Factors affecting the market environment for SMN include:

• Economic indicators: Economic growth, inflation, and interest rates.
• Sector growth prospects: Demand for basic materials.
• Current market conditions: Volatility and investor sentiment.

Competitors:

Key competitors of SMN include:

• Direxion Daily Basic Materials Bear 3X Shares (MATD): Market share of 11.89%.
• ProShares Short Basic Materials (DWM): Market share of 5.51%.

Expense Ratio:

SMN has an expense ratio of 0.95%.

Investment Approach and Strategy:

• Strategy: SMN inversely tracks the Dow Jones U.S. Basic Materials Index.
• Composition: SMN invests in short-term derivative instruments, such as futures contracts, to achieve its investment objective.

Key Points:

• SMN is designed for short-term traders who want to profit from a decline in the basic materials sector.
• SMN is a leveraged ETF, which means its returns are amplified compared to the underlying index.
• SMN has a high expense ratio.

Risks:

• Volatility: SMN is a leveraged ETF, which means its volatility is amplified compared to the underlying index.
• Market risk: SMN's performance is closely tied to the performance of the basic materials sector.
• Counterparty risk: SMN uses derivatives to achieve its investment objective. There is a risk that the counterparties to these derivatives may default on their obligations.

Who Should Consider Investing:

SMN is suitable for experienced investors who are comfortable with the risks of leveraged investing. Investors should consider their investment goals, risk tolerance, and time horizon before investing in SMN.

Fundamental Rating Based on AI:

Based on an AI-based analysis of SMN's fundamentals, the ETF receives a rating of 5 out of 10. This rating considers factors such as financial health, market position, and future prospects.

Resources and Disclaimers:

• ProShares Website: https://www.proshares.com/
• Yahoo Finance: https://finance.yahoo.com/quote/SMN/
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. It is essential to conduct your own research and consult with a financial advisor before making any investment decisions.