UYG: PROSHARES ULTRA FINANCIALS
Share-split context: This ETF has both forward- and reverse-split history. The most recent recorded event was on May 24, 2018 with coefficient 3.000003. Current price-return figures are already split-adjusted. Forward splits receive no automatic performance penalty; reverse-split history remains a separate structural warning.
ETF Education Report: ProShares Ultra Financials (UYG)
What this ETF is trying to do
ProShares Ultra Financials (UYG) is a leveraged ETF. This means it uses financial tools to try to amplify the performance of the financial sector. Its top holdings include things like JPMorgan Chase & Co and Berkshire Hathaway Inc Class B, along with various financial index swaps. Because it is leveraged, its price movements may be much larger than the regular financial sector.
What the numbers show
It is important to understand that "price return" and "total return" are different. Price return only tracks the change in the share price. Total return includes both the share price change and any cash distributions paid out.
• Year-to-Date (YTD): The price return is approximately -7.76%, while the total return is approximately -7.28%.
• One-Year: The price return was approximately -14.20%, while the total return was approximately -4.69%.
• Three-Year: The price return was approximately 96.24%, while the total return was approximately 121.68%.
This ETF has a history of both forward and reverse splits. A forward split means one old share became multiple new shares, which lowers the price per share but keeps your ownership value the same. A reverse split means multiple old shares were combined into fewer new shares, which raises the price per share mechanically.
Income and distribution explanation
This ETF has a distribution yield of approximately 12.26%. This represents the cash distributions relative to the ETF price. Over the last 12 months, it made four distributions. While a high yield provides cash income, it does not guarantee that the investment's value will stay the same.
NAV erosion explanation
"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's assets). While a falling share price is not the same thing as NAV erosion, investors watch for it closely. This ETF has an erosion-risk score of 75, which is labeled as "mild price erosion." There is no severe erosion-risk flag for this fund.
Pros
• The ETF offers a high distribution yield of approximately 12.26%.
• It has shown strong three-year total returns of approximately 121.68%.
Cons
• The ETF is leveraged, which can lead to larger price drops.
• Recent one-year and YTD price returns have been negative.
• It shows signs of mild price erosion.
Beginner takeaway
When looking at high-yield ETFs like UYG, remember that a high distribution yield can sometimes exist alongside a declining share price. Always look at the "total return" to see how both price changes and cash payments affect the overall investment.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | FINANCIAL SELECT SECTOR INDEX SWAP | n/a | 24.31% |
| 2 | JPMORGAN CHASE & CO | JPM | 6.86% |
| 3 | BERKSHIRE HATHAWAY INC CLASS B | BRK-B | 6.83% |
| 4 | SP FINANCIAL SELECT SECTOR INDEX SWAP | n/a | 4.79% |
| 5 | PROSHARES GENIUS MONEY MARKET ETF | IQMM | 4.76% |
| 6 | VISA INC CLASS A | V | 4.40% |
| 7 | MASTERCARD INC CLASS A | MA | 3.34% |
| 8 | BANK OF AMERICA CORP | BAC | 2.96% |
| 9 | THE GOLDMAN SACHS GROUP INC | GS | 2.20% |
| 10 | WELLS FARGO & CO | WFC | 1.95% |