The ProShares Short Basic Materials ETF (SBM) is managed by ProShare Advisors and aims to provide daily returns that are inverse (-1x) to the performance of the Dow Jones U.S. Basic Materials Index (DJUSBM). This index is designed to measure the stock performance of U.S. companies in the basic materials industry, encompassing various sectors such as aluminum, steel, non-ferrous metals, commodity chemicals, specialty chemicals, forest products, paper products, as well as the mining of precious metals and coal. ProShare Advisors employs a mathematical approach to achieve the ETF's daily investment objective through a combination of financial instruments, including derivatives and money market instruments. The fund engages in daily rebalancing to maintain consistent exposure, with the goal of providing inverse returns to the index on a daily basis.
The ProShares Short Basic Materials ETF (SBM) primarily seeks daily returns that are inversely correlated (-1x) to the performance of the S&P Dow Jones U.S. Basic Materials Index, as reflected by the Bloomberg ticker symbol DJUSBM. While SBM's primary objective is not dividend-focused, its dividend distribution is influenced by the constituent companies' dividend policies within the basic materials industry. Dividend distributions from SBM occur in accordance with the underlying index and are subject to the individual dividend policies and performances of the companies it comprises. As a result of its daily inverse exposure strategy, SBM is designed for short-term trading and may not be suitable for long-term dividend investors.
Tracking the DJ U.S. Basic Materials Index is at the core of the ProShares Short Basic Materials ETF's strategy. SBM seeks daily returns that are inverse (-1x) to the returns of the DJ U.S. Basic Materials Index. The Index measures the stock performance of U.S. companies in the basic materials industry, including those involved in aluminum, steel, non-ferrous metals, commodity chemicals, specialty chemicals, forest products, paper products, and mining of precious metals and coal. SBM primarily achieves its inverse exposure through derivatives such as swap agreements and may also hold short-term cash instruments like U.S. Treasury Bills and Repurchase Agreements. This ETF is designed for investors seeking to profit from inverse daily moves in the basic materials sector, and it aims to provide results inversely correlated to the Index on a daily basis.
The correlation aspect of the ProShares Short Basic Materials ETF (SBM) is generally characterized by its inverse relationship with the performance of the Dow Jones U.S. Basic Materials Index. As SBM seeks to provide daily returns that are inversely correlated to the index, it tends to perform well when the basic materials sector faces downturns or underperformance. This ETF serves as a useful tool for investors looking to hedge against or profit from potential declines in the basic materials industry. For more specific and up-to-date correlation information, investors can utilize the ETF Insider web app, which offers in-depth data and visualization tools to analyze SBM's correlation with various market factors and assets, helping investors make informed decisions and uncover potential trading opportunities.
The ProShares Short Basic Materials ETF (SBM) primarily invests in financial instruments designed to produce daily returns inversely related to the performance of the S&P Dow Jones Indices LLC's Basic Materials Industry Index (DJUSBM). This index measures the stock performance of U.S. companies engaged in the production of basic materials such as aluminum, steel, non-ferrous metals, commodity and specialty chemicals, forest products, paper products, as well as the mining of precious metals and coal. SBM seeks to provide investors with inverse exposure to this sector's daily returns, making it a potential choice for those looking to hedge against downturns in basic materials. However, it's important to note that SBM aims to achieve its investment objective for a single day, and its returns may not perfectly align with the inverse performance of the index over longer periods due to daily rebalancing and other factors.
The exposure characteristic of the ProShares Short Basic Materials ETF (SBM) is designed to provide daily inverse returns to the performance of the DJUSBM Index, which measures the stock performance of U.S. companies in the basic materials industry. SBM achieves this exposure by primarily investing in financial instruments, including derivatives such as swap agreements, to seek returns that are inversely correlated to the Index. It also utilizes money market instruments like U.S. Treasury Bills and repurchase agreements to manage cash positions effectively.
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