BETHESDA, Md.--(BUSINESS WIRE)--ProShares, the largest provider of geared ETFs,1 announced today a 1:2 reverse split on ProShares Short S&P 500 (SH).
SH is the largest geared fund in the United States with approximately $3 billion in assets.2 The fund has an average daily volume of about 7 million shares.
The details of the reverse split are as follows:
| Ticker | ProShares ETF | Split Ratio | Old CUSIP | New CUSIP | ||||
| SH | Short S&P 500 | 1:2 | 74347R503 | 74347B425 | ||||
The reverse split will be effective on June 24, 2016, when the fund will begin trading at its post-split price. The ticker symbol for the fund will not change. The fund will be issued a new CUSIP number, listed above.
The reverse split will increase the price per share of the fund with a proportionate decrease in the number of shares outstanding. Every two pre-split shares will result in the receipt of one post-split share, which will be priced two times higher than the NAV of a pre-split share.
Illustration of a Reverse Split
The following table shows the effect of a hypothetical 1-for-2 reverse split:
| Period | # of Shares Owned | Hypothetical NAV | Value of Shares | |||
| Pre-Split | 1,000 | $10.00 | $10,000.00 | |||
| Post-Split | 500 | $20.00 | $10,000.00 | |||
Fractional Shares from Reverse Splits
For shareholders who hold quantities of shares that are not an exact multiple of the reverse split ratio, that is, not a multiple of 2, the reverse split will result in the creation of a fractional share. Post-reverse split fractional shares will be redeemed for cash and sent to your broker of record. This redemption may cause some shareholders to realize gains or losses, which could be a taxable event for those shareholders.
About ProShares
ProShares helps investors to go beyond the limitations of conventional investing and face today's market challenges. ProShares strives to help investors build better portfolios by providing access to a wide variety of investment exposures and strategies delivered with the liquidity, transparency and cost effectiveness of ETFs. Our wide array of ETFs can help you reduce volatility, manage risk and enhance returns.
Geared (Short or Ultra) ProShares ETFs seek returns that are either 3x, 2x, -1x, -2x or -3x the return of an index or other benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their ProShares holdings consistent with their strategies, as frequently as daily. For more on correlation, leverage and other risks, please read the prospectus.
Investing involves risk, including the possible loss of principal. ProShares ETFs are generally non-diversified and each entails certain risks, which may include risk associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. Short positions lose value as security prices increase. Please see their summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will achieve its investment objective.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing.
ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds' advisor or sponsor.
1 Source: ProShares is the largest provider of geared (leveraged and inverse) ETFs according to Lipper, based on a worldwide analysis of all know providers of funds in these categories; the analysis covered ETFs and ETNs by assets and number of funds (as of 12/31/2015).
2 Source Morningstar; assets as of 5/31/2016.
