Proshares Ultrashort Barrons One-Day Wonders Report

Something to look into before purchasing a Proshares Ultra ETF. The performance of some leveraged funds, including China ultrashort, is based on only the DAILY performance results of the underlying index, not long-term returns. Let's say Index A goes up 10% on Day One, then drops 9% on day two, for a two-day return of about 0%. On Day One, a leveraged short fund based on this index would go down 20%. On Day Two, it would jump 18% (two times the index's 9% drop). But because that rise would be from a base equaling only 80% of your original investment, you would now have less than 95% of whatever you had anted up. In other words, while Traditional Index A broke even, the UltraShort Index lost 5.6%.