ETF Education Report: PROSHARES SHORT 7-10 YEAR TREASURY (TBX)

What this ETF is trying to do

The TBX ETF is an "inverse" ETF. This means it is designed to move in the opposite direction of 7-10 year Treasury bonds. While most investments try to go up when the market goes up, an inverse ETF is built to behave differently based on how bond prices move.

What the numbers show

It is important to understand that "price return" and "total return" are two different things. Price return only tracks how the share price changes. Total return includes both the price change and any cash payments (distributions) made to investors.

Here is what the data shows for TBX:

• Year-to-Date (YTD): The price return is approximately 5.99%. When you include distributions, the total return is approximately 7.04%.

• One Year: The price return was approximately 5.06%, while the total return was approximately 8.18%.

• Three Years: The price return was approximately -1.93%. However, the total return was positive at approximately 12.60%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $28.04, and the current price is $29.46.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. TBX has a distribution yield of approximately 2.78%. This number describes the cash payments relative to the ETF's price. Over the last 12 months, there were 4 distributions, which usually happen every quarter.

It is important to remember that a distribution yield is not the same as total return. While distributions provide cash, they do not guarantee that your original investment will stay the same value.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of an ETF's underlying assets decreases over time. StockValueFinder uses an "erosion-risk score" to help monitor this. For TBX, the erosion score is 100, and the label states "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag.

Pros

• The ETF has provided a positive total return over the last three years, even though the share price itself was slightly down.

• The data shows no detected price erosion.

Cons

• Because this is an inverse ETF, its performance will move opposite to the bond market, which can be complex for new investors.

• The three-year price return has been negative.

Beginner takeaway

When looking at TBX, it is helpful to distinguish between the share price and the total return. While the share price might go down, the total return can be higher because of the cash distributions paid out to investors. Always remember that high yields or specific price movements are measurements of the past and do not predict what will happen in the future.