ProShares ETFs: ETFs with Short or Leveraged Exposure to Market and Sector Indexes

Now, seek to benefit when you think commodity prices will fall

You can buy into commodities when you think they’re going up. But how can you seek to benefit—or protect your portfolio—when you think commodities could go down?

Short Commodity ProShares let you seek profit or hedge against falling commodity prices. And because they are ETFs, they can be bought and sold like a stock. In fact, they're the only ETFs designed to go up when commodity prices go down.

How they work

Short Commodity ProShares are designed to move in the opposite direction of commodity prices. And they include built-in leverage, so you get more short exposure for your investment. For example, if the DJ-AIG Commodity Index drops 1% in a day, ProShares UltraShort DJ-AIG Commodity (CMD) should gain 2% (before fees and expenses). On the flip side, if the index gains 1% in a day, CMD should lose 2% (again, before fees and expenses). ProShares UltraShort Gold and ProShares UltraShort Silver seek to track the spot prices set by the London Bullion Market Association, while the other Commodity ProShares seek to track Dow Jones Commodity Indexes, which are based on the price of futures.

1. Hedge against declines.

Let’s say you believe in the long-term prospects of your commodity investments but think commodity prices are temporarily overvalued. Instead of selling your holdings (which may involve tax consequences and transaction costs), you may want to create a hedge to attempt to protect your commodity investments in the short-term.

Short Commodity ProShares are one way you can seek to create a hedge for your commodity holdings. So, if your commodity investments have a strong correlation to the DJ-AIG Commodity Index, you could buy ProShares UltraShort DJ-AIG Commodity (CMD), which is designed to move in the opposite direction of the index. If the index declines, your hedge should help offset losses in your commodity
investments.*

*Note that if the DJ-AIG Commodity Index rises while you hold your Commodity ProShares position, your hedge will actually result in a loss. Short Commodity ProShares may require you to make adjustments to your holdings to maintain a specific short exposure. Also, remember that these ETFs have fees, expenses and tax consequences of their own.

Short Commodity 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. Commodity ProShares are non-diversified and may be more susceptible to single issuer risk than a more diversified fund. There is no guarantee that any ETF will achieve its investment objective. Please see the prospectus for a more complete description of these risks.

Investing in these ETFs involves substantial risk, including loss of principal.

These ETFs invest substantially in financial instruments linked to the performance of commodities, such as swap agreements, forward contracts, and futures and options contracts, which may be subject to greater volatility than investments in traditional securities. Certain of these financial instruments will also subject the Funds to counterparty risk and credit risk, which could result in significant losses for the Funds.

This information must be accompanied or preceded by a current ProShares Trust II Prospectus which may be obtained by clicking here.

Commodity ProShares are not investment companies registered under the Investment Company Act of 1940. Please read the prospectus carefully before investing.

Shares of these ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

The ProShares Trust II is a commodity pool as defined in the Commodity Exchange Act and the applicable regulations of the CFTC. ProShare Capital Management LLC is the Trust Sponsor, commodity pool operator (CPO) and commodity trading advisor. The Sponsor is registered as a CPO and commodity trading advisor with the CFTC, and is a member of the NFA. Neither Commodity ProShares ETFs nor ProShares Trust II are investment companies registered under the Investment Company Act of 1940.

"Dow Jones®", “DJ”, “Dow Jones-UBS Commodity Index^SM”, and “Dow Jones-AIG Crude Oil Sub-Index^SM" are service marks of Dow Jones & Company, Inc. and American International Group, Inc., as the case may be, and have been licensed for use for certain purposes by ProShare Capital Management LLC. ProShares are not sponsored, endorsed, sold or promoted by Dow Jones, UBS Securities LLC, UBS AG, or any of their respective subsidiaries or affiliates, and none of Dow Jones, UBS Securities LLC, UBS AG or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product(s).

ProShares registered under the Investment Company Act of 1940 are distributed by SEI Investments Distribution Co., which is not affiliated with ProFunds Group or its affiliates. Your use of this site signifies that you accept our Terms & Conditions of Use.

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Now, seek to benefit when you think commodity prices will fall

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PROSPECTUS

1. Hedge against declines.

2. Seek profit from downturns.

3. Dial down commodity exposure.

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