At a glance
HDG charges 0.95% a year, above the 0.8% average of the 2 funds most like it (the most expensive of 3). It has $22.2M in assets, the 3rd largest of that group; it paid 2.29% of its price in distributions over the past 12 months, quarterly. Over the past year it returned +5.9% with distributions reinvested, the weakest of those 3 funds; over three years it returned +7.9% a year. At its worst it fell 13.7% in the 2020 crash (S&P 500: 33.7%) and 13.3% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 8 months and 19 months after the lows. Its ten largest positions make up 81.9% of the fund, out of 1,961 in all.
The short version
ProShares Hedge Replication ETF (HDG) tries to copy hedge fund returns without owning hedge funds, by tracking the Merrill Lynch Factor Model – Exchange Series. That benchmark blends six market measures, held long or short (betting on rises or falls), to mirror the HFRI Composite Index, a gauge of hedge fund performance. It charges 0.95% a year, above the 0.80% peer average, and returned 3.27% a year over the 10 years to December 31, 2025.
Price history
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HDG +5.9% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| HDG official prospectus, to Dec 31, 2025 | — | +6.96% | — | +2.59% | +3.27% | — |
| HDG price data to Oct 27, 2026 | +5.9% | +5.9% | +7.9% | +3.1% | +3.7% | +2.8% |
- Over the year to Oct 27, 2026, HDG returned +5.9%, 3rd of 3 among similar funds.
- Its 5-year annualized return was +3.1% and its 10-year +3.7%.
- In the 2020 COVID crash it fell 13.7% and regained its old high 7.5 months after the low.
- Its worst full calendar year was 2022 (-8.5%); its best was 2019 (+9.6%).
- The deepest fall in its price history was 15.3% (Nov 8, 2021 to Sep 29, 2022), recovered by Sep 24, 2024.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +5.9% | — |
| 2025 | +7.2% | +6.96% |
| 2024 | +5.1% | +5.17% |
| 2023 | +7.2% | +7.22% |
| 2022 | -8.5% | -8.30% |
| 2021 | +3.0% | +2.74% |
| 2020 | +7.4% | +7.32% |
| 2019 | +9.6% | +9.50% |
| 2018 | -4.5% | -4.21% |
| 2017 | +5.6% | +5.47% |
| 2016 | +2.0% | +2.23% |
| 2015 | -0.5% | — |
| 2014 | +1.4% | — |
| 2013 | +4.5% | — |
| 2012 | +2.9% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 13.7% over that stretch · deepest drop along the way 13.7%, back to its old high 7.5 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 12.9% over that stretch · deepest drop along the way 13.3%, back to its old high 19.3 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.8600 | |
| 2025 | $1.3200 | -23.3% |
| 2024 | $1.7200 | +1.2% |
| 2023 | $1.7000 | +844.4% |
| 2022 | $0.1800 | +350.0% |
| 2020 | $0.0400 | -92.2% |
| 2019 | $0.5100 | +127.7% |
| 2018 | $0.2240 | +74566.7% |
| 2015 | $0.0003 | -99.4% |
| 2012 | $0.0500 |
What's inside
As of Aug 31, 2026, the fund held 1,961 securities; the ten largest made up 81.91% of assets.
| Holding | Weight | |
|---|---|---|
| U.S. Treasury Bills Bonds and notes | 68.57% | |
| Repurchase Agreement RA | 5.47% | |
| Repurchase Agreement RA | 3.64% | |
| Repurchase Agreement RA | 2.18% | |
| Repurchase Agreement RA | 1.16% | |
| Repurchase Agreement RA | 0.73% | |
| JFrog Ltd. | 0.04% | |
| Moog, Inc. | 0.04% | |
| UMB Financial Corp. | 0.04% | |
| Glaukos Corp. | 0.04% | |
| Brinker International, Inc. | 0.04% | |
| BrightSpring Health Services, Inc. | 0.04% | |
| Krystal Biotech, Inc. | 0.04% | |
| Cytokinetics, Inc. | 0.04% | |
| Protagonist Therapeutics, Inc. | 0.03% |
By country
United States 92.63%Canada 0.2%Bermuda 0.2%Cayman Islands 0.1%Israel 0.06%By issuer
US Treasury 68.57%Companies 24.98%Foreign governments 0.01%The bonds mature in 0.2 years on average (weighted by size), with an average coupon of 0%.
Source: N-PORT holdings report as of Aug 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Aug 31, 2026, investors added a net $581K (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.89%, -0.86%, +0.92%.
How it works
HDG tracks the Merrill Lynch Factor Model – Exchange Series, maintained by Merrill Lynch International. It aims to mimic the HFRI Composite Index, a gauge of hedge fund performance, without owning hedge funds. Instead it uses six market measures: the S&P 500, Russell 2000, MSCI EAFE and MSCI Emerging Markets indexes, the ProShares UltraShort Euro ETF and 3-month Treasury bills. Each month, weights reset to the mix that would have tracked the HFRI most closely over the prior two years. Each factor can be held long, or short (a position that gains when prices fall).
ProShare Advisors builds that mix mathematically, using stocks and derivatives such as swaps, contracts in which a bank pays the fund an asset's return. As of August 31, 2026, about 69% of assets sat in Treasury bills and 13% in repurchase agreements, very short-term loans backed by securities. About 12% was in stocks such as JFrog, Moog and UMB Financial, each near 0.04%. Swaps tied to the EFA and EEM funds supplied foreign-stock exposure.
The fund is not leveraged, and its Treasury bills averaged 0.2 years to maturity, so rate swings barely move their prices. Bigger risks: a swap partner could default, a two-year lookback may not predict how hedge funds behave next, and costs can pull returns below the benchmark.
What it really costs
- HDG charges 0.95% a year, versus an average of 0.8% for the similar funds below (3rd of 3, cheapest first).
- Of that, 0.75% is the management fee; the rest covers other fund expenses.
- The fee includes a 1.21% 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 $2,398 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| HDG | $97 | $559 | $1,048 | $2,398 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
It aims for hedge-fund-like returns that move less than stocks, though it still fell more than 13% in both 2020 and 2022.
HDG could add a calmer slice: over the year to October 27, 2026, its beta of 0.42 meant it moved less than half as much as the stock market. Launched in 2011, it has no 2008 record. It still fell 13.7% in the 2020 COVID crash, recovering in about 7.5 months, and 13.3% in 2022, needing 19.3 months to recover. Its deepest drop, 15.3% from November 2021 to September 2022, took about 24 months to recover, and 2022 was its worst calendar year, down 8.3%. A retiree withdrawing in 2022 would have drawn from a fund that stayed below its peak until 2024.
Over the 12 months to October 27, 2026, it yielded 2.29%, paid quarterly. It charges 0.95% a year; in the SEC's standard $10,000 example, costs total $2,398 over 10 years. Past results don't predict future ones, and a plan should weigh the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want hedge-fund-like returns in an ETF, built from stocks, swaps and Treasury bills rather than stakes in actual hedge funds.
- Those seeking a calmer holding: its volatility, a measure of price swings, was 6.4% over the year to October 27, 2026.
- Investors content with modest quarterly payouts: it yielded 2.29% over the 12 months to October 27, 2026, paying $1.23 per share.
Look elsewhere if
- Cost-focused investors: its 0.95% expense ratio is the highest of three funds compared, versus 0.70% for GTR and 0.90% for KMLM.
- Anyone wanting crash protection: it fell 13.7% in the 2020 COVID crash and 13.3% in 2022, a drop that took 19.3 months to recover.
- Investors seeking long-term growth: it returned 3.27% a year over the 10 years to December 31, 2025, and lost 8.3% in 2022.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
Net assets from each fund's latest N-PORT or annual report where available. Returns through Oct 27, 2026.Questions investors ask
What does HDG ETF invest in?
Mostly short-term Treasury bills, plus stocks and swaps, not hedge funds. As of August 31, 2026, about 69% of assets sat in US Treasury bills and 13% in repurchase agreements, very short-term loans backed by securities. About 12% was in stocks held in tiny slices, such as JFrog and Moog at about 0.04% each, while swaps tied to the EFA and EEM funds added foreign-stock exposure. The mix is set to track the Merrill Lynch Factor Model – Exchange Series, which aims to mimic hedge fund returns.
Does HDG protect against stock market crashes?
Not reliably. HDG fell 13.7% in the 2020 COVID crash, between February 19 and March 23, 2020, though it recovered by November 5, 2020. In the 2022 downturn it dropped 13.3% and needed 19.3 months to climb back, and 2022 was its worst calendar year, down 8.3%. It has tended to move less than the stock market: its beta, a measure of sensitivity to market moves, was 0.42 over the year to October 27, 2026.
What is HDG's expense ratio?
HDG's expense ratio, the yearly cost taken from fund assets, is 0.95%, according to its prospectus filed September 25, 2026. That is after a fee waiver of 1.21 percentage points; the management fee alone is 0.75%. In the SEC's standard example, $10,000 earning 5% a year would incur $97 in costs over one year, $559 over three, $1,048 over five and $2,398 over ten. The jump after year one suggests the example assumes the waiver ends. The two similar funds we compare average 0.80%.
Does HDG pay dividends?
Yes. HDG pays distributions quarterly. Over the 12 months to October 27, 2026, it paid $1.23 per share, a yield of 2.29%. Payouts can change from quarter to quarter because they depend on what the holdings earn, and as of August 31, 2026, most of the portfolio sat in Treasury bills and repurchase agreements. The fund's stated aim is to track its benchmark, not to generate income.
HDG vs GTR: what's the difference?
The main overlap is holdings, not strategy. GTR, the WisdomTree Target Range Fund, was matched to HDG because its bond holdings have a similar maturity and issuer mix (0.4 years on average versus HDG's 0.2), not because of its strategy. GTR costs 0.70% a year versus HDG's 0.95%, returned 9.7% over the year to October 27, 2026 versus 5.9%, and held $72.9 million in net assets versus $22.2 million as of August 31, 2026.