How to turn a bad day for the S&P 500 into a good day for you:
Three strategies with Short ProShares

Despite a nice run by the S&P 500 in recent months, rising inflation, concerns about financials, and some bad corporate news are raising concerns about whether U.S. stocks can continue their rally. If you think the S&P 500 will lose steam, consider using one of the following strategies with Short ProShares. They're ETFs designed to go up when markets go down, and they make it easy for you to do something about market declines.

Strategy #1: Seek profit when the S&P 500 goes down.

Scenario:
You believe large-cap stocks will decline, and you want to take advantage of the potential trend.

Potential Solution:
Seek profit by investing in Short S&P500 ProShares (SH), which seeks 100% of the inverse of the S&P 500 Index's daily performance, or invest in UltraShort S&P500 ProShares (SDS), which seeks 200% of the inverse of the S&P 500 Index’s daily performance (before fees and expenses), to magnify your short exposure to the S&P 500.

Strategy #2: Attempt to hedge a large-cap investment.

Scenario:
You’re concerned about the near-term direction of large-cap stocks but believe in their long-term prospects. And you’d rather avoid the taxes and other potential costs of selling.

Potential Solution:
By investing in Short S&P500 ProShares (SH), you can seek to hedge a decline in the value of your large-cap investments. A hedge also allows you to remain invested if the market goes up, and may limit transaction costs and tax liabilities associated with selling.

You can also magnify your hedge, for no additional investment, with UltraShort S&P500 ProShares (SDS). If the S&P 500 Index rises while you hold your ProShares position, however, your hedge most likely will result in a loss. Also keep in mind that ProShares have fees, expenses and tax consequences of their own.¹

Strategy #3: Rebalance large-cap exposure without selling stocks.

Scenario:
Let’s say you hold shares of a large-cap mutual fund that have increased in value over time, and large-cap equities are now overweighted. equities are now overweighted in your portfolio. You would like to bring the portfolio back in line, but don't want to sell shares because of the potential tax consequences and the possibility of being hit with redemption fees.

Potential Solution:
Buy shares of Short S&P500 ProShares (SH) and reduce your exposure to the overweighted index. Or, buy UltraShort S&P500 ProShares (SDS) and use less cash to obtain this short exposure. Keep in mind that you may need to adjust your UltraShort ProShares holdings daily to maintain a specific short-exposure ratio in your portfolio.

Reminder:
In all these scenarios it is important to remember that ProShares ETFs are benchmarked daily to published indexes. For example, Short S&P500 ProShares aims to provide the inverse of the daily performance of the S&P 500 Index before fees and expenses. ProShares are not designed to track their benchmarks for longer periods of time. So, while ProShares may perform as you might expect on a given day, they may either trail or outperform their benchmarks over longer durations, like one week, month or year.

Why go short with ProShares?

Short selling a stock or ETF requires a margin account. Short ProShares don't. Short ProShares are one of the simplest ways to get short exposure to indexes because they allow you to go short without the hassles—or expense—of a margin account. It's is as simple as buying a stock.

Learn more about the benefits of Short ProShares >>

Short ProShares should lose value when their market indexes rise—a result that is opposite from traditional ETFs—and they entail certain risks, including, in some or all cases aggressive investment technique, correlation, and market price variance, all of which can increase volatility and decrease performance. ProShares are non-diversified and may be more susceptible to single issuer risk than a more diversified fund. There is no guarantee that any ProShares ETF will achieve its investment objective. Please see the prospectus for a more complete description of these risks.

Carefully consider the investment objectives, risks, and charges and expenses of ProShares before investing. This and other information can be found in the prospectus. Read the prospectus carefully before investing. For a ProShares prospectus, please click here and seek advice from your financial advisor or broker dealer representative. 

1 Neither ProShares nor SEI provides tax advice. You should seek advice based on your particular circumstances from an independent tax advisor.

"S&P 500" Index is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by ProShares. ProShares are not sponsored, endorsed, sold, or promoted by The McGraw-Hill Companies, Inc., and The McGraw-Hill Companies, Inc. makes no representation regarding the advisability of investing in ProShares. THIS ENTITY AND ITS AFFILIATES MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES.

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