Share-split context: A reverse split was recorded on Nov 20, 2025 with coefficient 0.2. 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 UltraShort S&P500 -2x Shares (SDS)

What this ETF is trying to do

The SDS is a special type of fund known as an "inverse" and "leveraged" ETF. This means it is designed to move in the opposite direction of the S&P 500 index. Because it is "2x leveraged," it aims to provide twice the opposite performance of that index.

What the numbers show

It is important to understand the difference between "price return" and "total return." Price return only tracks how the share price changes. Total return includes both the price change and any cash distributions paid out.

Based on the data provided:

• Year-to-Date (YTD): The price return is approximately -23.20%, while the total return is approximately -21.05%.

• One Year: The price return is approximately -26.74%, while the total return is approximately -23.36%.

• Three Years: The price return is approximately -71.42%, while the total return is approximately -66.22%.

Because this ETF has a history of reverse splits, we use these split-adjusted percentage returns to understand performance. A reverse split happens when multiple old shares are combined into fewer new shares, which causes the per-share price to rise mechanically.

Income and distribution explanation

This ETF has a distribution yield of approximately 5.38%. This represents the cash distributions relative to the ETF price. Over the last 12 months, there were 4 payouts, which usually happen quarterly.

However, a high distribution yield does not mean an investor earned that percentage as their total return. In this case, even with the cash distributions, the total returns have been negative over the one-year and three-year periods.

NAV erosion explanation

This ETF has a severe erosion-risk flag. This means the split-adjusted price trend and the erosion score triggered a high-level warning.

The fund has an erosion score of 30, which is labeled as "Significant price erosion." In simple terms, "NAV erosion" refers to a decline in the value of the fund's underlying assets. While a falling market price is not the same thing as NAV erosion, the high erosion-risk score and significant price declines are important measurements to note.

Pros

• The fund provides a way to seek returns that move in the opposite direction of the S&P 500.

• It provides regular cash distributions (usually quarterly).

Cons

• The fund has experienced significant price declines over the one, three, and five-year periods.

• It carries a severe erosion-risk flag.

• The income rating grade is an "F."

Beginner takeaway

When looking at ETFs, it is important to remember that high yields can sometimes exist even when the share price is falling. For this ETF, the total return (which includes distributions) has been negative for several years. Always distinguish between the cash you receive from distributions and the actual change in the value of your investment.