SBB Profile
The ProShares Short SmallCap600 is an actively managed exchange-traded fund (ETF) designed to deliver inverse returns relative to the performance of the S&P SmallCap 600 Index. The fund achieves this objective by investing in financial instruments that are expected to produce daily returns that are inversely correlated to the index. This approach allows investors to potentially profit from declines in small-cap stock performance while managing risk in a volatile market.
The S&P SmallCap 600 Index, which serves as the benchmark for the fund, measures the performance of 600 small-cap U.S. companies. This index is float-adjusted and market capitalization-weighted, representing a broad cross-section of the small-cap segment of the U.S. equity market. It includes a diverse range of industries, with components selected based on liquidity, price, market capitalization, financial viability, and public float criteria. This rigorous selection process ensures the index reflects a robust and representative sample of small-cap companies.
The ProShares Short SmallCap600 fund's investment strategy involves using various financial instruments, such as futures contracts, swaps, and other derivatives, to achieve its inverse return goal. By utilizing these instruments, the fund aims to produce returns that move in the opposite direction of the index on a daily basis. This strategy is intended for short-term investors seeking to hedge against or capitalize on declines in the small-cap equity market.
As a non-diversified fund, the ProShares Short SmallCap600 focuses its investments on instruments related to the small-cap sector, which can lead to higher volatility and risk compared to more broadly diversified funds. The fund’s performance is closely tied to the daily movements of the S&P SmallCap 600 Index, making it a specialized tool for investors looking to manage exposure to small-cap stocks or implement short-term trading strategies.
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