High Yield Interest Rate Hedged
- Provides the return potential of a diversified portfolio of high-yield corporate bonds
- Targets zero interest rate risk by including a built-in hedge against rising rates that uses short positions in U.S. Treasury futures
- Offers even less interest rate sensitivity than short-term bonds by targeting a duration of zero
Fund Characteristics as of 7/31/17 **
** The cost of the interest rate hedge (using Treasury futures) is reflected in the NAV, not in the yields. Net effective duration is as of the first business day following the as of date noted.
Price Information as of 9/6/17 **
** The cost of the interest rate hedge (using Treasury futures) is reflected in the NAV, not in the yields.
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Shares are bought and sold at market price (not NAV) and are not individually redeemed from the fund. Market price returns are based upon the midpoint of the bid/ask spread at 4:00 p.m. ET (when NAV is normally determined for most funds) and do not represent the returns you would receive if you traded shares at other times. Brokerage commissions will reduce returns. Current performance may be lower or higher than the performance quoted. For standardized returns and performance data current to the most recent month end, see Performance.
There is no guarantee any ProShares ETF will achieve its investment objective.
Shares of any ETF are generally bought and sold at market price (not NAV) and are not individually redeemed from the fund. Brokerage commissions will reduce returns.
Investing involves risk, including the possible loss of principal. This ProShares ETF is diversified and entails certain risks, including risks associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. Please see summary and full prospectuses for a more complete description of risks.
HYHG seeks to hedge high yield bonds against the potential negative impact of rising Treasury interest rates by taking short positions in U.S. Treasury futures. The short positions are not intended to mitigate credit risk or other factors influencing the price of the bonds, which may have a greater impact than rising or falling interest rates. No hedge is perfect, and there is no guarantee the short positions will completely eliminate interest rate risk. Investors may be better off in a long-only high yield investment when interest rates fall than investing in HYHG, where hedging may limit potential gains or increase losses. Performance could be particularly poor during risk-averse, flight-to-quality environments when high yield bonds commonly decline in value. HYHG may be more volatile than long-only high yield bond investments. HYHG may contain a significant allocation to callable high yield bonds, which are subject to prepayment and other risks that could result in losses for the fund. There is no guarantee the fund will have positive returns.
Bonds will decrease in value as interest rates rise.
High yield bonds may involve greater levels of credit, liquidity and valuation risk than for higher-rated instruments. High yield bonds may involve greater levels of credit, liquidity and valuation risk than higher-rated instruments. High yield bonds are more volatile than investment grade securities, and they involve a greater risks of loss (including loss of principal) from missed payments, defaults or downgrades because of their speculative nature.
Short positions in a security lose value as that security’s price increases.
The fund concentrates its investments in certain sectors. Narrowly focused investments typically exhibit higher volatility.
“CITI” is a trademark and service mark of Citigroup Inc. or its affiliates, is used and registered throughout the world, and has been licensed for use by ProShares. ProShares ETFs based on the “Citi High Yield (Treasury Rate-Hedged) Index” are not sponsored, endorsed, sold, or promoted by Citigroup Index LLC (“Citi Index”) or its affiliates (collectively, “Citigroup”), and they make no representation regarding the advisability of investing in ProShares ETFs. CITI INDEX MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall Citigroup be liable for any direct, indirect, special or consequential damages in connection with any use of the “Citi High Yield (Treasury Rate-Hedged) Index.”
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing.
ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds’ advisor or sponsor.