The ProShares Short High Yield ETF (SJB) is managed by ProShare Advisors, which employs a mathematical approach to achieve the fund's daily investment objective. SJB seeks to provide daily returns that are inverse (-1x) to those of the Markit iBoxx $ Liquid High Yield Index, administered by IHS Markit Benchmark Administration Limited (IMBA). This index represents a balanced selection of U.S. dollar-denominated high yield corporate bonds available for sale within the United States. SJB primarily invests in financial instruments such as derivatives and money market instruments to achieve its inverse exposure, aiming to capitalize on short-term fluctuations in the high-yield bond market. It's essential to note that SJB is designed for short-term trading and may not perform as expected over longer periods due to daily rebalancing and compounding effects.
While the primary objective of the ProShares Short High Yield ETF (SJB) is not focused on dividends, it is essential to understand its dividend distribution policies. SJB aims to provide daily returns that are inversely correlated (-1x) to the performance of the Markit iBoxx $ Liquid High Yield Index. As such, SJB does not typically generate traditional dividend income. Instead, it seeks to achieve its investment objective through daily rebalancing and compounding of returns, which may result in gains or losses for investors based on the index's daily performance. Investors should be aware that SJB's approach may differ significantly from traditional dividend-paying investments, as it primarily seeks to provide inverse exposure to the high-yield corporate bond market.
SJB, the ProShares Short High Yield ETF, tracks the performance of the Markit iBoxx $ Liquid High Yield Index, administered by IHS Markit Benchmark Administration Limited (IMBA). This index is designed to provide a balanced representation of U.S. dollar-denominated high yield corporate bonds available for sale within the United States. SJB achieves its objective by investing in financial instruments, including derivatives like swap agreements, to seek daily returns that are inverse (-1x) to the returns of the Index. Additionally, the fund may hold money market instruments, such as U.S. Treasury Bills and repurchase agreements, as part of its strategy. Daily rebalancing is utilized to maintain consistent exposure to the Index, but it's important to note that the fund's returns over an extended period may differ from the inverse (-1x) of the Index's returns due to factors like compounding and volatility. Investors in SJB should carefully consider the risks associated with high-yield corporate bonds and the fund's investment approach as outlined in its Prospectus.
The correlation aspect of the ProShares Short High Yield ETF (SJB) is essential in understanding its behavior concerning the Markit iBoxx $ Liquid High Yield Index. SJB aims to produce daily returns that are inverse (-1x) to the returns of the Index for that day, making it an effective tool for investors looking to profit from high-yield corporate bond market declines. This inverse correlation strategy can be a valuable addition to a portfolio as it provides a way to hedge against credit market volatility and may offer diversification benefits. To study correlations with SJB and gain deeper insights, investors can utilize the ETF Insider web app, which offers a simple visualization tool to explore the overlap with other US ETFs, helping make informed investment decisions.
The ProShares Short High Yield ETF (SJB) primarily invests in financial instruments designed to produce daily returns that are inversely correlated with the Markit iBoxx $ Liquid High Yield Index. This index includes U.S. dollar-denominated high yield corporate bonds and aims to provide a balanced representation of these bonds in the United States. SJB achieves inverse exposure to this index by using derivatives like swap agreements and short-term cash instruments, such as U.S. Treasury Bills and repurchase agreements. It follows a mathematical approach to maintain its portfolio consistent with its daily investment objective, with a focus on daily rebalancing. Due to daily compounding and market volatility, SJB's returns can differ from the inverse of the index over longer periods, and it carries risks associated with daily rebalancing and the index's performance. As of May 31, 2022, the index was focused on the consumer services industry group.
The exposure profile of the ProShares Short High Yield ETF (SJB) revolves around its strategy of seeking daily returns that are inverse (-1x) to the Markit iBoxx $ Liquid High Yield Index. This approach aims to provide investors with a hedge against declines in the high-yield corporate bond market within the United States. SJB achieves this by primarily investing in financial instruments, including derivatives and money market instruments, while maintaining a focus on credit quality and liquidity. For a deeper understanding of SJB''s exposure and how it fits into your portfolio, consider using the ETF Insider web app, which offers comprehensive data and visualization tools for a wide range of U.S. ETFs, allowing you to assess correlations, overlaps, and more.
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5 min readThe SJB ETF is a specialized investment fund that focuses on global companies in the relevant sectors. This exchange-traded fund offers investors exposure to a diverse range of innovative and cutting-edge companies engaged in advancements in the industry. Discover the potential growth opportunities and risks associated with investing in this dynamic sector through the SJB ETF.
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