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

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

SDS facts



July 2006 

Total Net Assets

$1.8 billion

Investment Approach

Seeks daily investment results that correspond to two times the inverse (-2x) 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


1-Year / 3-Year / 5-Year Returns

(28.7%) / (31.9%) / (25.8%)


Guggenheim Inverse 2x S&P 500

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

On CAPS, 78% of the 443 All-Star members who have rated SDS believe the ETF will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, All-Star TerryHogan, succinctly summed up the SDS bear case for our community:

Guaranteed to underperform in anything but a straight down market. The way these ultrashorts are set up, volatility means their returns will degrade over time, so even in a down market they can underperform (or at least not deliver their promised returns). Hold these for the long term at your own risk.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.