Why SCO 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 UltraShort DJ-UBS Crude Oil ETF (NYSE: SCO) have received the dreaded one-star ranking.

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

SCO facts

 

 

Inception

November 2008

Total Net Assets

$469.9 million

Investment Approach

The investment seeks to provide daily investment results that correspond to twice (200%) the inverse of the daily performance of the Dow Jones UBS Crude Oil Sub-Index. The fund invests in any one of or combinations of the financial instruments (swap agreement, futures contracts, forward contracts, option contracts) with respect to the applicable fund's benchmark to the extent determined appropriate by the Sponsor.

Expense Ratio

0.95%

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

(24.3%) / (30.1%) / (23.7%)

Alternatives

ProShares UltraShort Silver 

ProShares UltraShort Gold 

United States Short Oil

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

On CAPS, 69% of the 367 members who have rated SCO believe the ETF will underperform the S&P 500 going forward.

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

Electric cars are cool and all, but try towing a 26-foot holiday trailer with a Prius. Does Deere make an electric combine? Of course this pick isn't even about the price of crude, it's about the crappiness of leveraged ETFs in general, more specifically short leveraged ETFs, and in particular short leveraged commodity ETFs which are the worst of all.

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