Summary
URTY Chart
URTY And IWM: A Bet On Russell 2000 With Short, Medium And Long-Term Catalysts
The ProShares UltraPro Russell 2000 and iShares Russell 2000 ETFs have both marginally underperformed the S&P 500 so far this year, in line with poor performance over the past decade. In this article, I discuss multiple catalysts that may boost Russell 2000 returns, including an end to the government shutdown, Fed rate cuts, and cheap valuations. As such, this may be an opportunistic time to go long URTY and IWM, confirming a buy rating on both ETFs.
URTY: When Slippage Bites
ProShares UltraPro Russell2000 targets 3x daily returns of the Russell 2000 Index, but actual returns can deviate significantly over time. Holding leveraged ETFs beyond one day exposes investors to compounding effects and beta slippage, especially in volatile markets. Beta slippage can cause leveraged ETF returns to underperform or outperform the expected multiple, depending on volatility and holding period.
URTY ETF: Small Caps Near A Key Technical Juncture
URTY is not ideal for long-term holding because of its high costs, low yield, and the amplified losses associated with 3X leverage. Naturally, when the market is bullish, URTY outperforms other ETFs like IWM by 3X. Seasonal trends and technical indicators suggest a potential bullish phase for URTY, with strong uptrends likely in November and December.
ProShares UltraPro Russell2000 Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 201 | $7,940.81 | $16,524.21 | $8,583.4 | 108.09% |
| MFA Millington Financial Advisors LLC Millington Financial Advisors LLC | 11,311 | $486,742.59 | $940,848.98 | $454,106.39 | 93.29% |
| CCW Cassaday & Co. Wealth Management LLC Cassaday & Co. Wealth Management LLC | 80,109 | $3.46M | $6.73M | $3.27M | 94.44% |
| CAD Chelsea A. Delgado Main Street Group Ltd. | 223 | $11,496 | $18,432.06 | $6,936.06 | 60.33% |
 Rajiv Shah KINGSWOOD WEALTH ADVISORS, LLC | 4,016 | $207,025 | $333,870.16 | $126,845.16 | 61.27% |
ProShares UltraPro Russell2000 (URTY) FAQ
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ProShares UltraPro Russell2000 Profile
| ARCA Exchange | US Country |
Overview
The fund mentioned operates under the management of ProShare Advisors, focusing on generating daily returns that align with its Daily Target. This objective is pursued through investments in various financial instruments selected by ProShare Advisors based on their potential to collectively match the performance projection. The fund's benchmark is an index that evaluates the performance of small-cap companies in the U.S. stock market, providing a focused insight into this particular segment. It is notable that the fund is described as non-diversified, which means it does not spread its investments across a wide array of securities. Instead, it concentrates its investments in a more targeted manner, likely within the small-cap domain defined by its benchmark index.
Products and Services
- Daily Target-Focused Investments
This product involves the fund's strategic investment in financial instruments that are meticulously selected by ProShare Advisors. The objective is to ensure that the combination of these investments yields returns on a daily basis that are consistent with the fund's Daily Target. This approach requires a dynamic and knowledgeable handling of the investment portfolio, adjusting to market movements and conditions to meet the specified return objectives.
- Small-Cap U.S. Stock Market Performance Index
As part of its investment strategy, the fund uses a specific index as a measure of small-cap U.S. stock market performance. This index serves as a benchmark for assessing the success of the fund's investment strategy, providing a clear target for performance comparison. The choice of a small-cap index highlights the fund's focus on a segment of the market that is often characterized by higher growth potential, albeit with a correspondingly higher level of risk compared to large-cap indices.
- Non-Diversified Fund Structure
Unlike diversified funds, which invest across a broad range of securities and industries, this fund adopts a non-diversified structure. This means it invests more heavily in fewer securities or industries. While this could lead to higher volatility and risk, it also offers the potential for substantial gains if the targeted investments perform well. The non-diversified approach signifies the fund's strategy of concentrated investment, focusing on specific opportunities within the small-cap U.S. stock market segment that ProShare Advisors believes have the most promising potential for achieving the fund's Daily Target.
