Share-split context: A forward split was recorded on Aug 18, 2020 with coefficient 2. A forward split turns each old share into multiple new shares and lowers the quoted price per share proportionally. Proportional ownership is unchanged at the split moment, so the split itself creates neither a gain nor a loss. The price-return figures in this report are already split-adjusted.

ETF Education Report: ProShares Ultra 20+ Year Treasury (UBT)

What this ETF is trying to do

The ProShares Ultra 20+ Year Treasury (UBT) is an ETF that focuses on long-term government bonds. It is important to note that this is a leveraged ETF. This means it is designed to move more significantly than the underlying bonds it tracks.

What the numbers show

When looking at UBT, we look at two different types of returns: 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.

Because this ETF has a history of forward splits, we use split-adjusted returns to see how the value has changed. In a forward split, each old share becomes multiple new shares, and the price per share drops proportionally. This does not change how much you own; it just changes how the shares are counted.

Here is what the data shows:

• Year-to-Date (YTD): The price return is approximately -21.03%, while the total return is approximately -19.47%.

• One-Year: The price return is approximately -24.76%, while the total return is approximately -22.48%.

• Three-Year: The price return is approximately -22.20%, while the total return is approximately -13.17%.

• Five-Year: The total return is approximately -70.60%.

Income and distribution explanation

Some investors look at ETFs for cash income, known as distributions. UBT has a distribution yield of approximately 3.67%. This represents the cash paid out relative to the current share price of $13.07. Over the last 12 months, there were 4 distributions.

It is important to remember that a high 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" refers to a decline in the Net Asset Value, or the actual value of the assets held by the fund. While a falling share price is a "share-price decline," it does not always mean the NAV has eroded.

However, StockValueFinder uses an erosion-risk score to measure this risk. UBT has an erosion score of 55, which is labeled as "Moderate price erosion." This is a measurement of risk rather than a confirmed fact about the fund's total value.

Pros

• The ETF provides regular cash distributions (usually quarterly).

• It offers exposure to long-term Treasury bonds through a leveraged structure.

Cons

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

• The total returns have been negative over these timeframes.

• It is a leveraged product, which can lead to more dramatic price movements.

Beginner takeaway

When looking at UBT, it is helpful to distinguish between the cash you receive from distributions and the actual change in the share price. Even though the ETF pays a distribution yield, the total return has been negative over several years due to the decline in share prices. Always remember that high yields can exist even when the share price is falling.