Share-split context: A reverse split was recorded on Nov 7, 2024 with coefficient 0.25. 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 Financials -1x Shares (SEF)

What this ETF is trying to do

The ProShares Short Financials -1x Shares (ticker: SEF) is an "inverse" ETF. This means it is designed to move in the opposite direction of the financial sector. If the financial sector goes down, this ETF is designed to go up.

What the numbers show

It is important to understand that "price return" and "total return" are different things. Price return only tracks the change in the share price. Total return includes both the share price changes and any cash distributions paid out.

Here is what the data shows for SEF:

• Year-to-Date (YTD): The price return is approximately 2.23%. However, the total return is higher at approximately 4.11%.

• One-Year: The price return was a loss of approximately 8.03%. When including distributions, the one-year total return was a gain of approximately 2.87%.

• Three-Year: The price return was a loss of approximately 39.85%. The three-year total return was a loss of approximately 31.66%.

This ETF has a history of reverse splits. In a reverse split, multiple old shares are combined into fewer new shares. This causes the price per share to rise mechanically, but it does not increase the actual value of your investment.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. SEF has a distribution yield of approximately 2.89%. This means the cash paid out is about 2.89% of the current share price. Over the last year, there were four distributions.

While these payments provide cash, a high yield does not guarantee that the investment is growing. You should always look at the total return to see how the share price and distributions worked together.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). While a falling share price can look like erosion, they are not always the same thing.

StockValueFinder uses an "erosion-risk score" to measure this risk. SEF has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The ETF provides a way to participate in the inverse movement of the financial sector.

• The total return figures (which include distributions) have been higher than the price-only return figures in both the one-year and year-to-date periods.

Cons

• The three-year price return shows a significant decline of approximately 39.85%.

• The ETF has a history of reverse splits, which changes the number of shares held.

Beginner takeaway

When looking at SEF, it is important to distinguish between the share price and the total return. Because this is an inverse ETF, its performance will behave very differently than a standard fund. Always check the total return to see the full picture of how distributions and price changes affect the investment.