TWM | ProShares UltraShort Russell2000

TWM ISSUER

The ProShares Trust, issuer of TWM, aims to generate daily returns consistent with the Daily Target by investing in financial instruments deemed by ProShare Advisors as conducive to this goal. Specifically, the Trust primarily targets inverse leveraged exposure to at least 80% of its assets in component securities of the FTSE Russell 2000 Index or instruments with similar economic characteristics. This index, constructed and maintained by FTSE Russell, reflects the performance of small-cap U.S. stocks, constituting roughly 7% of the total market capitalization of the Russell 3000 Index, which encompasses approximately 96% of the investable U.S. equity market. The Trust employs a variety of financial instruments, including derivatives like swap agreements and futures contracts, alongside money market instruments such as U.S. Treasury Bills and repurchase agreements, to achieve its investment objectives. ProShare Advisors utilizes a mathematical approach to determine the optimal investment positions for the Trust, seeking daily rebalancing to maintain consistent exposure to the Index. This strategy allows the Trust to pursue its investment objectives regardless of market conditions, while adjustments in response to daily Index movements ensure alignment with the desired inverse leveraged exposure.

TWM DIVIDEND

As an inverse leveraged exchange-traded fund (ETF), TWM, issued by the ProShares Trust, typically does not pay dividends in the traditional sense. Instead, its performance is primarily tied to the daily inverse performance of its underlying index, the FTSE Russell 2000 Index. Consequently, investors in TWM are more focused on capturing returns inversely correlated with the daily movements of the small-cap U.S. stock market rather than receiving dividend income. It's important for investors to understand that TWM's investment strategy aims to provide inverse leveraged exposure to the index's performance, and as such, dividends are not a significant component of its investment objectives.

TWM TRACKING

Tracking refers to the ability of an exchange-traded fund (ETF) like TWM, issued by the ProShares Trust, to closely replicate the performance of its underlying index, in this case, the FTSE Russell 2000 Index. Given TWM's objective of providing inverse leveraged exposure to the daily performance of the small-cap U.S. stock market, tracking accuracy is crucial for investors seeking to profit from short-term market movements. ProShares employs various financial instruments, including derivatives and money market instruments, to achieve this inverse leveraged exposure. However, due to the complexities involved in daily rebalancing and the compounding effects of leverage, perfect tracking over longer periods is challenging to maintain. Investors should regularly monitor TWM's performance relative to its benchmark index to assess its tracking efficiency and adjust their investment strategies accordingly.

TWM CORRELATION

The correlation of TWM, an inverse leveraged exchange-traded fund (ETF) issued by the ProShares Trust, is intricately tied to its underlying index, the FTSE Russell 2000 Index. As TWM seeks to provide inverse leveraged exposure to the daily performance of the small-cap U.S. stock market, its correlation with the index is typically negative. This means that as the Russell 2000 Index moves in one direction, TWM tends to move in the opposite direction, albeit with amplified returns due to leverage. However, it's important for investors to note that while TWM's correlation with its underlying index is intended to be inverse, it may not perfectly mirror the index's movements over longer periods due to factors such as tracking error and compounding effects. Consequently, investors should carefully assess TWM's correlation with the Russell 2000 Index to gauge its effectiveness as a tool for hedging or speculating on short-term market movements.

TWM SECTOR

As an inverse leveraged exchange-traded fund (ETF) issued by the ProShares Trust, TWM typically does not focus on specific sectors in the same way as traditional ETFs. Instead, its investment strategy is primarily geared towards providing inverse leveraged exposure to the daily performance of the small-cap U.S. stock market as represented by its underlying index, the FTSE Russell 2000 Index. Consequently, TWM's sector exposure is largely dictated by the composition of the Russell 2000 Index, which includes companies from various sectors such as technology, healthcare, consumer discretionary, and industrials, among others. However, due to TWM's inverse leveraged nature, its sector exposure may not directly mirror that of the Russell 2000 Index, as its returns are amplified and inversely correlated with the index's performance. Investors should consider TWM's broader market exposure rather than sector-specific allocations when incorporating it into their investment portfolios.

TWM EXPOSURE

TWM, an inverse leveraged exchange-traded fund (ETF) issued by the ProShares Trust, offers investors exposure to the inverse daily performance of the small-cap U.S. stock market. The fund seeks to achieve this exposure by employing a variety of financial instruments, including derivatives and money market instruments, to obtain inverse leveraged exposure to its underlying index, the FTSE Russell 2000 Index. As TWM aims to deliver returns that are inversely correlated with the daily movements of the Russell 2000 Index, investors use it primarily for hedging purposes or to speculate on short-term market downturns. However, it's essential for investors to understand that TWM's exposure is leveraged, meaning that its returns are magnified relative to the index's performance, and this leverage can lead to heightened volatility and risks. Therefore, investors should carefully consider their risk tolerance and investment objectives before incorporating TWM into their portfolios.