ProShares Ultra Basic MaterialsUYM

ETF Research and Analysis

by Robert Goldsborough

Suitability
Ultra Basic Materials ProShares UYM is a leveraged exchange-traded fund that should be viewed as a specialty satellite holding best suited for sophisticated investors who understand how this ETF works and who have a high Read more

Bull Case

Strong infrastructure and construction spending in emerging markets are expected to support demand for commodities in the medium term. In addition, further demand for commodities will be driven by an eventual cyclical upturn in developed markets.

While the majority of the underlying index's components produce commodity products, many of the large-cap, multinational firms have had some success moving up the value chain into more specialized, higher margin products. About 47% of this index is devoted to companies with durable competitive advantages. Read more

Bear Case

Leveraged and inverse funds are very risky and are best suited for sophisticated investors who understand the effects of compounding and volatility on the performance of this fund.

This fund holds derivative products such as futures and swaps and is therefore exposed to counterparty risks.

Most materials companies produce commodity products and operate in a highly cyclical industry. Read more