ProShares To Reverse-Split UVXY

By
August 30, 2012
Share:

Related ETFs

Ticker Fund name
UVXYProShares Ultra VIX Short-Term Futures
Related ETF Lists
Alternatives ETFs

 

ProShares, the Bethesda, Md.-based fund provider known for its extensive roster of leveraged and inverse funds, said it will serve up a 1-for-10 reverse split on the ProShares Ultra VIX Short-Term Futures ETF (NYSEArca: UVXY) in September.

The reverse split will shrink the number of UVXY shares on the market while pumping up the share price 10 times. However, the reverse split won’t change the value of a shareholder’s investment, the company said in a statement.

The ETF was trading at $5.70 a share midday Thursday, up 4.2 percent on the day. That means that at today’s price, UVXY would be trading at $57 a share after the reverse split—a price at which bid/ask spreads would amount to a lot less for a given dollar value of an investment than if the shares remained at their current value.

UVXY is the only ETF on the market to offer leveraged exposure to VIX futures by delivering twice the daily return of its underlying S&P index. The fund is a hedging tool against equities risk, but it may also help investors gain on volatility spikes one month into the future, according to the company.

The split can lead to fractional shares for investors who are not holding an exact multiple of the reverse split. Such fractional shares will be redeemed for cash, which can mean an investor might realize gains or losses and be taxed on those, the company said.

Outstanding shares of the fund will be exchanged for new shares on Sept. 6, with post-split shares first trading on Sept. 7.

UVXY has gathered just over $305 million since it came to market in October 2011. Ticker, symbol and underlying index will not change, but UVXY will get a new CUSIP.

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

Small-cap stock ETF 'IWM' took a breather and found itself among the biggest creations on Monday, July 27, raking in more than $420 million in one day. Total U.S.-listed ETF assets dropped to $2.111 trillion.

A roster of ETFs including 'IJH' and 'IWM' paced iShares' issuer-leading inflows Monday, July 27. Total U.S.-listed ETF assets dipped to $2.111 trillion.

ETF.COM ANALYST BLOGS

By Paul Britt

Toss and turn about whether to hedge currency risk, but don’t lose sleep over the derivatives themselves.

By Dave Nadig

With the China A-share market half-broken, ETF investors should be very, very cautious.

By Drew Voros

Price depreciation and continued outflows have made for a tough few years.

By Dave Nadig

Legendary investor trips over how ETFs work.

ETF INDUSTRY PERSPECTIVE

By Invesco PowerShares

A more in-depth look at the smart-beta survey's results.

By Invesco PowerShares

Smart beta appears to be poised for further growth.