Frequently Asked Questions About Changes to the UVXY and SVXY Investment Objectives

Click to see historical NAVs, NAV change (%, $), and shares outstanding.

SEC 30-Day Yield is a standard yield calculation developed by the Securities and Exchange Commission (SEC) that facilitates fairer comparisons of funds. The figure reflects dividends and interest earned by the securities held by the fund during the most recent 30-day period, net the fund's expenses.

Unsubsidized SEC 30-Day Yield shows what the SEC 30-Day Yield would have been without the contractual fee waiver.

Duration is a measurement of how long, in years, it takes for the price of a bond to be repaid by its internal cash flows. Modified duration accounts for changing interest rates. It measures the sensitivity of the value of a bond (or bond portfolio) to a change in interest rates. Higher duration means greater sensitivity.

The weighted average maturity (WAM) of a portfolio is the average time, in years, it takes for the bonds in a bond fund or portfolio to mature. WAM is calculated by weighting each bond's time to maturity by the size of the holding. Portfolios with longer WAMs are generally more sensitive to changes in interest rates.

Yield to maturity (YTM) is the annual rate of return paid on a bond if it is held until the maturity date. Weighted average yield to maturity represents an average of the YTM of each of the bonds held in a bond fund or portfolio, weighted by the relative size of each bond in the portfolio.

A coupon is the interest rate paid out on a bond on an annual basis. The weighted average coupon of a bond fund is arrived at by weighting the coupon of each bond by its relative size in the portfolio.

Weighted average price (WAP) is computed for most bond funds by weighting the price of each bond by its relative size in the portfolio. This statistic is expressed as a percentage of par (face) value. The price shown here is "clean," meaning it does not reflect accrued interest.

Monthly volatility refers to annualized standard deviation, a statistical measure that captures the variation of returns from their mean and that is often used to quantify the risk of a fund or index over a specific time period. The higher the volatility, the more the returns fluctuate over time.

Absolute return strategies seek to provide positive returns in a wide variety of market conditions. These strategies employ investment techniques that go beyond conventional long-only investing, including leverage, short selling, futures, options, etc.

Arbitrage refers to the simultaneous purchase and sale of an asset in order to profit from a difference in the price of identical or similar financial instruments, on different markets or in different forms. For example, convertible arbitrage looks for price differences among linked securities, like stocks and convertible bonds of the same company. Merger arbitrage involves investing in securities of companies that are the subject of some form of corporate transaction, including acquisition or merger proposals and leveraged buyouts.

Commodity refers to a basic good used in commerce that is interchangeable with other goods of the same type. Examples include oil, grain and livestock.

Correlation is a statistical measure of how two variables relate to each other. Two different investments with a correlation of 1.0 will move in exact lockstep, investments with a correlation of zero will not move at all in relation to each other, while investments with a correlation of -1.0 will move in opposite directions. The higher the correlation, the lower the diversifying effect.

Currency refers to a generally accepted medium of exchange, such as the dollar, the euro, the yen, the Swiss franc, etc.

Market neutral is a strategy that involves attempting to remove all directional market risk by being equally long and short.

Futures refers to a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price.

Global macro strategies aim to profit from changes in global economies that are typically brought about by shifts in government policy, which impact interest rates and in turn affect currency, bond and stock markets.

Hedge funds invest in a diverse range of markets and securities, using a wide variety of techniques and strategies, all intended to reduce risk while focusing on absolute rather than relative returns.

Leverage refers to using borrowed funds to make an investment. Investors use leverage when they believe the return of an investment will exceed the cost of borrowed funds. Leverage can increase the potential for higher returns, but can also increase the risk of loss.

Long/short strategies involve using a combination of long and short positions in securities with the objective of reducing market risk and enhancing return.

Managed futures involves taking long and short positions in futures and options in the global commodity, interest rate, equity, and currency markets.

Precious metals refer to gold, silver, platinum and palladium.

Private equity consists of equity securities in operating companies that are not publicly traded on a stock exchange.

Real estate refers to land plus anything permanently fixed to it, including buildings, sheds and other items attached to the structure.

Short selling or "shorting" involves selling an asset before it's bought. Typically, an investor borrows shares, immediately sells them, and later buys them back to return to the lender.

Volatility is the relative rate at which the price of a security (or benchmark) moves up and down. Volatility is also an asset class that can be traded in the futures markets. Tradable volatility is based on implied volatility, which is a measure of what the market expects the volatility of a security's price to be in the future.

Geared investing refers to leveraged or inverse investing.
  • Leveraged investments provide magnified exposure to an asset or benchmark.
  • Inverse investments provide inverse exposure to an asset or benchmark.

CSM rated 5 stars for the 3-year period ending March 31, 2013 among 99 U.S. long/short equity funds. ^© 2013 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The Morningstar Rating^™ is provided for those ETFs with at least a 3-year history. Ratings are based on the ETF's Morningstar Risk-Adjusted Return measure which accounts for variation in monthly performance. The fund's performance and rating are calculated based on net asset value (NAV), not market price. An ETF's risk-adjusted return includes a brokerage commission estimate. This estimate is intended to reflect what an average investor would pay when buying or selling an ETF. This estimate is subject to change, and the actual commission an investor pays may be higher or lower. Morningstar compares each ETF's risk-adjusted return to the open-end mutual fund rating breakpoints for that category. The top 10% of ETFs in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The overall rating for an ETF is based on a weighted average of the time-period ratings (e.g., the ETF's 3-year rating). The determination of an ETF's rating does not affect the retail open-end mutual fund data published by Morningstar. Past performance is no guarantee of future results.

Duration to Worst (expressed in years) is the approximate amount by which a bond's price changes given a 1% change in its yield, calculated using the bond's nearest call date or maturity, whichever comes first.

SEC 30-Day Yield is a standard yield calculation developed by the Securities and Exchange Commission that allows investors to more fairly compare funds.

30-Day SEC Yield is designed to provide a standardized comparison of funds. The figure is calculated by dividing the net investment income (less expenses) by the current maximum offering price.

30-Day SEC Yield is calculated by dividing the net investment income (less expenses) by the current maximum offering price, and is designed to provide a standardized comparison of funds.

SEC 30-Day Yield (unsubsidized) is what the SEC 30-day yield would have been without the contractual fee waiver.

Current yield is equal to a bond's annual interest payment divided by its current market price. The current yield only refers to the yield of the bond at the current moment, not the total return over the life of the bond.

Dividend yield shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock.

Effective duration is a measure of a fund's sensitivity to interest rate changes, reflecting the likely change in bond prices given a small change in yields. Higher duration generally means greater sensitivity. Effective duration for this fund is calculated including both the long bond positions and the short Treasury futures positions.

Distribution Yield represents the annualized yield based on the last income distribution.

12-Month Yield represents the annualized yield based on the last twelve months of income distributions.

Trailing price to earnings ratio measures market value of a fund or index relative to the collective earnings of its component stocks for the most recent 12-month period.

Price to book ratio measures market value of a fund or index relative to the collective book values of its component stocks.

Weighted average market cap is the average market value of a fund or index, weighted for the market capitalization (price times shares outstanding) of each component. In such a weighting scheme, larger market cap companies carry greater weight than smaller market cap companies.

Sometimes distributions are re-characterized for tax purposes after they've been declared. Here, a previous dividend has been re-characterized as a Return of Capital ("ROC"). An ROC is a distribution to investors that returns some or all of their capital investment, thus reducing the value of their investment. In an efficient market, the investment's price will fall by an amount approximately equal to the ROC. In general, investors are not taxed on an ROC unless it begins to exceed their original investment value.

This is the dollar amount of your initial investment in the fund.

This is the percentage change in the index or benchmark since your initial investment. Enter a positive or negative number.

This is the dollar value that your account should be after you rebalance.

This is the dollar amount you have invested in your fund.

Credit default swap (CDS) spread reflects the annualized amount (espressed in basis points) that a CDS protection buyer will pay to a protection seller. Higher CDS spreads indicate that the CDS market views the entity as having a higher risk of loss. The weighted average CDS spread in a portfolio is the sum of CDS spreads of each contract in the portfolio multiplied by their relative weights.

Spread duration is a measure of a fund's approximate mark-to-market price sensitivity to small changes in CDS spreads. Higher spread duration reflects greater sensitivity.

Shareholder Supplemental Tax Information

The S&P 500 is a measure of large-cap U.S. stock market performance. It is a float-adjusted, market capitalization-weighted index of 500 U.S. operating companies and real estate investment trusts selected through a process that factors in criteria such as liquidity, price, market capitalization and financial viability.

Infrastructure refers to companies that actually own and operate the transportation, communications, energy and water assets that provide essential services to our society.

Net effective duration is a measure of a fund's sensitivity to interest rate changes, reflecting the likely change in bond prices given a small change in yields. Higher duration generally means greater sensitivity. Net effective duration for this fund is calculated includes both the long bond positions and the short Treasury futures positions.