ProShares UltraPro Russell2000 (URTY)

ProShares UltraPro Russell2000 (UPRO) ETF Overview

Profile: UPRO is an exchange-traded fund (ETF) that seeks daily investment results that, before fees and expenses, are 3 times the daily performance of the Russell 2000® Index. It focuses on small-cap companies with a market capitalization between $300 million and $2 billion. UPRO utilizes a leveraged investment approach to amplify the returns of the underlying index.

Objective: The primary objective of UPRO is to provide investors with magnified exposure to the performance of the Russell 2000® Index, aiming to deliver triple the daily returns of the benchmark. This ETF caters to investors with a high-risk tolerance seeking amplified exposure to the small-cap segment of the US stock market.

Issuer: ProShares is the issuer of UPRO.

• Reputation and Reliability: ProShares is a well-established and reputable ETF provider with over $80 billion in assets under management (AUM). They offer a diverse range of innovative and thematic ETFs, including leveraged and inverse products.
• Management: ProShares has a team of experienced professionals with expertise in index tracking, portfolio management, and risk management.

Market Share: UPRO has a significant market share within the leveraged small-cap ETF segment. It is one of the most popular and actively traded leveraged small-cap ETFs.

Total Net Assets: As of November 9, 2023, UPRO has approximately $1.5 billion in total net assets.

Moat: UPRO's competitive advantages include:

• Leveraged exposure: UPRO provides triple the daily returns of the Russell 2000® Index, making it an attractive option for investors seeking amplified exposure to the small-cap market.
• Liquidity: UPRO is a highly liquid ETF with a significant average daily trading volume, ensuring easy entry and exit for investors.
• Experienced issuer: ProShares is a well-established and reputable ETF issuer with a strong track record in managing leveraged and inverse products.

Financial Performance: UPRO has historically delivered strong returns, significantly outperforming the Russell 2000® Index. However, it is important to note that leveraged ETFs amplify both gains and losses, leading to higher volatility.

Benchmark Comparison: UPRO has consistently outperformed the Russell 2000® Index, achieving triple the daily returns of the benchmark over various timeframes. However, this comes with the trade-off of higher volatility.

Growth Trajectory: The growth trajectory of UPRO is highly dependent on the performance of the underlying Russell 2000® Index and market conditions. Historically, small-cap stocks have outperformed large-cap stocks over the long term, suggesting potential for future growth.

Liquidity:

• Average Trading Volume: UPRO has an average daily trading volume of over 2 million shares, ensuring high liquidity and easy trading.
• Bid-Ask Spread: The bid-ask spread for UPRO is typically tight, indicating low transaction costs for investors.

Market Dynamics: Market dynamics affecting UPRO include:

• Economic indicators: Strong economic growth typically benefits small-cap companies, driving UPRO's performance.
• Interest rate environment: Rising interest rates can negatively impact small-cap stocks, potentially affecting UPRO's performance.
• Market volatility: Increased market volatility can amplify both gains and losses for UPRO due to its leverage.

Competitors: Key competitors of UPRO in the leveraged small-cap ETF segment include:

• Direxion Daily Small Cap Bull 3X Shares (TNA)
• MicroSectors FANG & Innovation 3X Leveraged ETN (FNGU)
• VelocityShares Daily 2x Small-Cap Index Bull ETN (TNAU)

Expense Ratio: The expense ratio of UPRO is 0.95%, which is considered average for leveraged ETFs.

Investment Approach and Strategy:

• Strategy: UPRO aims to deliver triple the daily performance of the Russell 2000® Index through a leveraged investment approach. It uses swap agreements and other financial instruments to achieve its目標.
• Composition: UPRO primarily invests in derivatives, such as swap agreements, that track the performance of the Russell 2000® Index.

Key Points:

• UPRO provides leveraged exposure to the Russell 2000® Index, aiming for triple the daily returns.
• It is a suitable investment for aggressive investors seeking amplified small-cap market exposure.
• UPRO has historically outperformed the benchmark but comes with higher volatility.
• The ETF has high liquidity and a competitive expense ratio.

Risks:

• Volatility: UPRO is a leveraged ETF, amplifying both gains and losses, leading to higher volatility than the underlying index.
• Market risk: UPRO's performance is highly dependent on the performance of the small-cap market, which can be subject to significant fluctuations.
• Counterparty risk: UPRO relies on swap agreements with counterparties, exposing it to potential risks associated with the counterparty's ability to fulfill its obligations.

Who Should Consider Investing: UPRO is suitable for investors with a high-risk tolerance seeking short-term amplified exposure to the small-cap market. It is not recommended for long-term investment horizons due to the compounding effect of leverage.

Fundamental Rating Based on AI:

Based on an AI analysis considering financial health, market position, and future prospects, UPRO receives a 7 out of 10 rating.

Justification: UPRO has a strong track record, high liquidity, and an experienced issuer. However, the significant volatility and risks associated with leverage pull down the overall rating.

Resources and Disclaimers:

• ProShares UPRO website: https://www.proshares.com/funds/UPRO
• Russell 2000® Index: https://www.ftserussell.com/products/indices/russell-2000
• YCharts: https://ycharts.com/indicators/proshares_ultrapro_russell2000_etf_upro

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a licensed financial professional before making any investment decisions.