(SDS) ProShares UltraShort S&P500 - Ratings and Ratios

The ProShares UltraShort S&P500 (SDS) is an inverse ETF that aims to provide daily returns that are opposite to the performance of the S&P 500 index, with a leverage of 2 times. This means that if the S&P 500 index falls by 1%, the fund is expected to rise by 2%, and vice versa.

The fund achieves this objective by investing in a range of financial instruments that are designed to provide inverse exposure to the S&P 500 index. These instruments may include derivatives, such as futures and options, as well as other securities that have similar economic characteristics to the components of the S&P 500 index.

Some key performance indicators (KPIs) to evaluate the SDS ETF include its tracking error, which measures the difference between the funds returns and its target returns. A lower tracking error indicates that the fund is more effective at achieving its objective. Another important KPI is the funds expense ratio, which is likely to be higher than that of a non-leveraged ETF due to the complexity of the investment strategy. Additionally, investors should also consider the funds liquidity and trading volume, as well as its volatility, which is likely to be higher than that of the underlying index due to the leverage.

Its worth noting that the SDS ETF is not suitable for long-term investors, as the funds returns are designed to be inverse to the daily returns of the S&P 500 index, rather than its long-term performance. The funds performance over longer periods can be significantly different from its target returns due to the compounding effect of daily returns. As such, the SDS ETF is typically used by traders and investors who are looking to hedge against short-term market declines or to speculate on market downturns.