SH
1x Short
ProShares Short S&P500
Shorts: S&P 500 (SPY)
Expense Ratio
0.88%
Leverage
1x Inverse
Issuer
ProShares
Inception
Jun 2006
Inverse ETF Risk
SH 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 SH Shorts
The ProShares Short S&P500 (SH) is designed to deliver the inverse (opposite) of the daily performance of the S&P 500 Index.
It uses derivatives like futures and swaps to achieve a -1x daily return. If the S&P 500 falls 1% in a day, SH aims to rise approximately 1%, and vice versa.
Key Risks
- Daily Reset Risk: Designed for daily goals; compounding can cause returns to deviate from the inverse of the index's return over longer periods.
- High Volatility & Loss Potential: Can produce significant losses quickly if the market rises, especially in strong bull markets.
- Counterparty Risk: Relies on derivatives like swaps, exposing the fund to the risk that its counterparties may default.
- High Expense Ratio (0.88%): The cost of the strategy is high, which erodes returns over time.
- Not a Long-Term Buy-and-Hold Investment: Due to daily reset mechanics, it is generally unsuitable as a permanent portfolio holding.
Best Use Cases
- Short-Term Hedging: To temporarily hedge a long S&P 500 portfolio against anticipated short-term declines.
- Tactical Bearish Bets: For sophisticated investors to express a short-term bearish view on the broad U.S. market.
- Portfolio Diversification: To potentially gain during market downturns, providing negative correlation to traditional equity holdings in the very short term.
Similar Instruments
Frequently Asked Questions
Is SH a good long-term investment?
No. SH is designed for daily performance. Due to compounding effects, its returns over periods longer than one day can differ significantly from the inverse of the S&P 500's return, making it unsuitable for long-term holding.
How does SH differ from buying puts or shorting SPY?
SH provides a simple, exchange-traded way to get inverse exposure without margin accounts or options complexity. However, it does not have the defined risk of long puts or the unlimited risk of shorting stock directly.
Can I use SH to hedge my portfolio?
Yes, it can be used as a short-term hedge against S&P 500 exposure. However, its daily reset feature means the hedge ratio needs frequent monitoring and adjustment to maintain the desired level of protection over time.