REK 1x Short
ProShares Short Real Estate
Shorts: DJ US Real Estate (IYR)
Expense Ratio
0.95%
Leverage
1x Inverse
Issuer
ProShares
Inception
Mar 2010
Inverse ETF Risk
REK is an inverse ETF designed for short-term hedging and trading. It resets daily and may not track the inverse of its index over longer periods.
What REK Shorts
ProShares Short Real Estate (REK) seeks daily investment results that correspond to -1x (the inverse) of the daily performance of the Dow Jones U.S. Real Estate Index. This index includes publicly traded REITs and real estate operating companies across all property types — office, residential, retail, industrial, data centers, cell towers, and healthcare facilities.
As a 1x inverse fund, REK is the most conservative way to short the real estate sector through an ETF. It does not use leverage, which means less compounding decay than SRS (2x) or DRV (3x). However, it still resets daily and will not perfectly track the inverse of the index over extended periods.
Key Risks
- Daily Reset Tracking Error: Even without leverage, REK resets daily. Over weeks or months, its performance will diverge from the simple inverse of the index's cumulative return, though less severely than leveraged alternatives.
- Dividend Drag: REITs pay substantial dividends that benefit long holders. REK holders bear the inverse effect — the index's total return includes dividends that work against the short position over time.
- Sustained REIT Rallies: During periods of falling interest rates or strong economic growth, REITs can rally persistently. REK will lose value steadily during these periods.
- Expense Ratio (0.95%): While REK avoids leverage costs, the 0.95% expense ratio is still a meaningful drag, especially when combined with the dividend headwind.
Best Use Cases
- Conservative REIT Hedging: REK is the best choice for investors who want to hedge REIT exposure without the amplified risk of leveraged products. Its 1x inverse exposure provides a more predictable hedge over short-to-medium periods.
- Rising Rate Positioning: Investors expecting sustained interest rate increases can use REK as a lower-risk way to profit from the resulting pressure on real estate valuations, with less daily decay than SRS or DRV.
- Portfolio Insurance: REK can serve as a tactical allocation within a diversified portfolio to reduce overall real estate exposure during periods of commercial real estate stress or REIT overvaluation.