UST Profile
The ProShares Ultra 7-10 Year Treasury fund is strategically designed to deliver twice the daily return of an index tracking U.S. Treasury securities with maturities between seven and ten years. To achieve its investment objective, the fund invests in a range of financial instruments, including swap agreements, futures contracts, and Treasury securities, which ProShare Advisors believe will collectively meet its target of doubling the daily performance of its underlying index. This leveraged approach aims to amplify returns based on the daily performance of the U.S. Treasury securities included in the index.
The underlying index consists of U.S. Treasury securities with remaining maturities ranging from seven to ten years. It specifically includes publicly issued Treasury securities that have a minimum outstanding face value of $300 million, excluding holdings by the Federal Reserve. This focus ensures that the index represents a broad and liquid segment of the Treasury market, providing exposure to medium-term government debt with significant market presence.
By concentrating on U.S. Treasury securities within the specified maturity range, the fund is designed to offer investors a means to gain targeted exposure to this segment of the government bond market. The leverage employed in the fund’s strategy means that its performance can significantly deviate from that of the index over periods longer than one day, as it is designed to reflect twice the daily return of the index. This leverage is intended to amplify gains in favorable market conditions but can also exacerbate losses in adverse scenarios.
Investors should consider the fund's non-diversified nature and the inherent risks associated with leveraged investments. While the fund seeks to provide enhanced returns based on its index, the use of leverage and the focus on a specific segment of the Treasury market can result in substantial volatility. As such, it is crucial for investors to evaluate how the fund aligns with their investment goals and risk tolerance, and to be aware of the potential for significant performance deviations over time.
|
