Share-split context: A reverse split was recorded on Nov 7, 2024 with coefficient 0.5. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: ProShares Short MSCI Emerging Markets -1x Shares (EUM)

What this ETF is trying to do

The EUM ETF is an "inverse" ETF. This means it is designed to move in the opposite direction of the MSCI Emerging Markets index. If that index goes down, this ETF is generally designed to go up.

What the numbers show

The current price of EUM is $15.58. Because this ETF has a history of reverse splits, we look at split-adjusted returns to understand its performance. A reverse split is when multiple old shares are combined into fewer new shares, which causes the price per share to rise mechanically.

Here is how the ETF has performed:

• Year-to-Date (YTD) Price Return: Approximately -22.41%

• Year-to-Date (YTD) Total Return: Approximately -20.59%

• One-Year Price Return: Approximately -24.65%

• One-Year Total Return: Approximately -22.13%

• Three-Year Price Return: Approximately -49.38%

• Three-Year Total Return: Approximately -43.13%

It is important to know the difference between these numbers. The price return only shows how much the share price changed. The total return includes both the price change and any cash distributions received.

Income and distribution explanation

EUM has a distribution yield of approximately 3.68%. This represents the cash distributions paid out relative to the ETF's price. Over the last 12 months, there were 4 distributions, which usually happen on a quarterly basis.

While some investors look for high yields to get cash income, it is important to remember that a distribution yield is not the same as total return. A high yield does not guarantee that your original investment will stay the same value.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling market price is not the same thing as NAV erosion, we use an "erosion-risk score" to measure this risk.

EUM has an erosion score of 55, which is labeled as "Moderate price erosion." This indicates a moderate level of risk regarding price deterioration.

Pros

• The ETF provides a way to bet against emerging markets.

• It pays regular cash distributions (usually quarterly).

Cons

• The ETF has experienced significant share-price declines over the last one, three, and five years.

• It has a history of reverse splits.

• The total returns have been negative over multiple timeframes.

Beginner takeaway

EUM is an inverse ETF, meaning it moves opposite to a specific market index. Investors should distinguish between price returns and total returns, especially when distributions are involved. Because this ETF has shown moderate price erosion and negative returns over several years, it is important to understand that receiving cash distributions does not prevent the share price from falling.