Share-split context: A forward split was recorded on Jan 13, 2022 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.

Understanding ProShares Ultra Consumer Discretionary (UCC)

ProShares Ultra Consumer Discretionary (UCC) is a leveraged ETF. This means it is designed to amplify the performance of the consumer discretionary sector. The fund's Top Holdings include a large amount of cash (50.29%), followed by companies like Amazon.com Inc (15.51%) and Tesla Inc (11.01%). Because this is a leveraged fund, it carries different risk characteristics than a standard ETF.

What the numbers show

When looking at UCC, it is important to distinguish between price return (the change in the share price) and total return (which includes distributions).

• Year-to-Date (YTD): The price return is approximately -19.26%, while the total return is approximately -18.40%.

• One-Year: The price return was approximately -18.77%, and the total return was approximately -17.68%.

• Three-Year: The price return was approximately 42.34%, and the total return was approximately 45.93%.

• Five-Year: The five-year total return was approximately -15.60%.

This ETF has a history of forward splits. In a forward split, each old share becomes multiple new shares, and the price per share falls proportionally. This change does not create a gain or a loss for the investor; it is simply a structural adjustment.

Income and distribution explanation

UCC provides cash distributions, which are often paid out quarterly (the fund had 4 payouts in the last 12 months). The distribution yield is approximately 1.47%.

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

NAV erosion explanation

The term "NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, we can look at price erosion. The fund has an erosion-risk score of 55, which is labeled as "moderate price erosion." This means the share price has shown some signs of declining over time.

Pros

• The fund offers exposure to major consumer brands like Amazon, Tesla, and Home Depot.

• It has shown a positive total return over a three-year period.

Cons

• The fund is leveraged, which can increase volatility.

• Recent one-year and year-to-date price returns have been negative.

• The fund shows moderate price erosion.

Beginner takeaway

UCC is a leveraged ETF focused on consumer companies. While it has provided significant total returns over the last three years, recent performance has been negative. Investors should be aware that high distribution yields do not protect against a falling share price, and the fund currently shows moderate price erosion.