3X DOW 30 (LONG & SHORT)
UDOW and SDOW are exchange-traded funds (ETFs) managed by ProShares that offer investors the opportunity to invest in the Dow Jones Industrial Average (DJIA) with leverage and as a short ETF.
The ProShares UltraPro Dow30 ETF (UDOW) seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the DJIA. This means that if the DJIA increases by 1%, UDOW is designed to increase by 3%. UDOW is a “long” ETF, which means it is designed to provide investors with amplified returns when the index it tracks increases.
On the other hand, the ProShares UltraPro Short Dow30 ETF (SDOW) seeks daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the DJIA. This means that if the DJIA decreases by 1%, SDOW is designed to increase by 3%. SDOW is a “short” ETF, which means it is designed to provide investors with amplified returns when the index it tracks decreases.
Investors who are bullish on the performance of the 30 large-cap U.S. stocks that are included in the DJIA may consider investing in UDOW as a way to gain exposure to these stocks with leverage. Similarly, investors who are bearish on the performance of these stocks may consider investing in SDOW as a way to hedge against potential losses in a large-cap stock portfolio or as a way to bet on the future decline of the DJIA.
It’s important to note that leveraged ETFs like UDOW and SDOW carry higher risk and are typically used by sophisticated investors who are comfortable with the potential for higher volatility and potential losses. Additionally, leveraged ETFs are designed for short-term trading and are not suitable for long-term investing.
In summary, UDOW and SDOW are ETFs that offer investors the opportunity to invest in the DJIA with leverage and as a short ETF. UDOW provides investors with amplified returns when the DJIA increases, while SDOW provides investors with amplified returns when the DJIA decreases. These ETFs carry different levels of risk and are designed for different investment objectives, so it’s important to do your research and understand the risks before investing.