Why SPXU Is Poised to Keep Plunging

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the ProShares UltraPro Short S&P500 (NYSEMKT: SPXU  ) have received the dreaded one-star ranking.

With that in mind, let's take a closer look at SPXU, and see what CAPS investors are saying about the ETF right now.

SPXU facts

   

Inception

June 2009

Total Net Assets

$580.7 million

Investment Approach

Seeks daily investment results that correspond to three times the inverse (-3x) of the daily performance of the S&P 500. The index 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 criteria such as liquidity, price, market capitalization, and financial viability.

Expense Ratio

0.93%

Year-to-Date / 1-Year / 3-Year Return

(30.5%) / (46.5%) / (42.9%)

Alternatives

ProShares Short S&P500 

ProShares UltraShort QQQ 

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 51% of the 459 members who have rated SPXU believe the ETF will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star TerryHogan, succinctly summed up the SPXU bear case for our community:

If there is anything other than a dramatic S&P plunge, this baby is basically mathematically guaranteed to underperform. Even with a long side-ways trend, expenses and volatility degradation will kill this sucker. This is just a short-term hold for people (read: suckers) that think they can time the market.

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Read/Post Comments (2) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 15, 2013, at 4:20 PM, auerpower1980 wrote:

    Looks like the S&P Plunged and this soared. Better luck next time. S&P back to 1400.

  • Report this Comment On April 17, 2013, at 11:10 AM, tstalkin101 wrote:

    Been holding..and adding SPXU for a couple weeks now on weakness...waiting for ..."the plunge" . Face it..the market has had a stupid crazy ride up. Saying US equities is the only quality place for the world investors to put their money is just stupid and no reason to buy this market right now. Maybe third quarter

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