ProShares UltraShort Energy

ProShares UltraShort Energy (DUG) aims to return two times the inverse (-2x) of the daily move in the S&P Energy Select Sector Index, which covers the energy companies in the S&P 500. It is designed for short-term bets against energy stocks. It uses swap contracts with large financial firms and resets daily, so long-run results can drift far from -2x: shares lost about 98% over the 10 years to October 27, 2026.

• Over the year to Oct 27, 2026, DUG returned -62.3%, 2nd of 7 among similar funds.
• Its 5-year annualized return was -39.6% and its 10-year -33.8%.
• In the 2020 COVID crash, while stocks fell, it gained 258.3%.
• Its worst full calendar year was 2022 (-73.0%); its best was 2018 (+36.2%).
• The deepest fall in its price history was 99.9% (Oct 10, 2008 to Oct 26, 2026), not yet recovered.

As of Aug 31, 2026, most of the fund sat in cash, Treasury bills and money-market holdings (47.68% of net assets), with its inverse exposure coming from 5 swap and futures positions rather than from owning the stocks outright.

• Over the three months to Aug 31, 2026, investors added a net $5.7M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +10.02%, -20.49%, -13.88%.

DUG's benchmark is the S&P Energy Select Sector Index, run by S&P Dow Jones Indices. It covers S&P 500 companies in two energy industries under the Global Industry Classification Standard (GICS), a common system for sorting companies by business: energy equipment and services, and oil, gas and consumable fuels. Companies are weighted by market value, so the largest count most. The index is reviewed each September, with weight adjustments in March, June and December.

ProShare Advisors uses a mathematical approach to set up swap agreements—contracts with major financial institutions in which the two sides exchange payments based on the index's moves—sized to deliver -2x its daily return before fees. Cash backing the swaps typically sits in Treasury bills, repurchase agreements (short-term loans secured by government securities) or a ProShares money market ETF. As of August 31, 2026, the fund held five total return swaps, with repurchase agreements making up about 56% of its $29.4 million in net assets.

The fund rebalances daily, trimming exposure after the index rises and adding after it falls. That targets -2x for each day, but over longer periods returns compound and can differ sharply from -2x the index's return, usually for the worse when prices swing back and forth. An index gain approaching 50% in one day could wipe out the investment.

• DUG charges 0.95% a year.
• Of that, 0.75% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.48% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $97 in the first year and $1,672 over 10 years (assuming a 5% annual return).

DUG resets its -2x inverse exposure every day, so its returns drift from the target over time, and it has lost about 99.9% from its October 2008 peak.

DUG's record in downturns is uneven. It gained 258.3% in the 2020 COVID crash, but lost 64.4% in the 2022 bear market. In the 2008 crisis it gained just 7.3% from the market's peak to its trough, with a 64.7% drop along the way. Its worst calendar year was 2022, at -73%, and its deepest decline, about 99.9% from October 2008 to October 2026, has not been recovered. Losses that deep and lasting would leave little to draw on in a bad year.

It paid $0.60 a share in quarterly distributions over the 12 months to October 27, 2026, a 4.78% yield, while shares returned -62.3%. Its expense ratio is 0.95%; the SEC's standard $10,000 example shows $97 in costs after one year and $1,672 after ten. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by leveraged/inverse funds on the same index (energy), same direction.