At a glance
ITWO charges 0.55% a year, above the 0.22% average of the 8 funds most like it (the 8th cheapest of 9). It has $197.9M in assets, the 7th largest of that group; it paid 7.5% of its price in distributions over the past 12 months, monthly. Over the past year it returned +15.5% with distributions reinvested (S&P 500: +11.5%), 3rd of those 9 funds. Its ten largest positions make up 9.7% of the fund, out of 1,958 in all.
The short version
ProShares Russell 2000 High Income ETF (ITWO) tracks the Cboe Russell 2000 Daily Covered Call Index. The index holds smaller US companies and sells one-day call options on them every trading day to collect income. That strategy produced a 7.5% trailing yield as of October 27, 2026, paid monthly. The trade-off is cost: ITWO charges 0.55% a year, against 0.07% for Vanguard's plain Russell 2000 fund, VTWO.
Price history
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ITWO +15.5% 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 | |
|---|---|---|---|---|---|---|
| ITWO official prospectus, to Dec 31, 2025 | — | +14.05% | — | — | — | +12.98% |
| ITWO price data to Oct 27, 2026 | +16.4% | +15.5% | — | — | — | +16.3% |
- Over the year to Oct 27, 2026, ITWO returned +15.5%, 3rd of 9 among similar funds.
- Its worst full calendar year was 2025 (+14.2%); its best was 2025 (+14.2%).
- The deepest fall in its price history was 44.6% (Nov 29, 2024 to Mar 10, 2025), recovered by Oct 31, 2025.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +16.4% | — |
| 2025 | +14.2% | — |
| 2024 | — | +14.05% |
| 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 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Before this security existed |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $2.7400 | |
| 2025 | $4.8200 |
What's inside
As of Aug 31, 2026, the fund held 1,958 securities; the ten largest made up 9.65% of assets, and 2.49% sat in cash and money-market holdings.
| Holding | Weight | |
|---|---|---|
| Repurchase Agreement RA | 3.38% | |
| Repurchase Agreement RA | 2.24% | |
| Repurchase Agreement RA | 1.35% | |
| Repurchase Agreement RA | 0.72% | |
| Repurchase Agreement RA | 0.45% | |
| JFrog Ltd. | 0.32% | |
| Moog, Inc. | 0.31% | |
| UMB Financial Corp. | 0.30% | |
| Glaukos Corp. | 0.30% | |
| Brinker International, Inc. | 0.29% | |
| BrightSpring Health Services, Inc. | 0.28% | |
| Krystal Biotech, Inc. | 0.27% | |
| Cytokinetics, Inc. | 0.27% | |
| Protagonist Therapeutics, Inc. | 0.26% | |
| SM Energy Co. | 0.26% |
By country
United States 91.23%Canada 1.55%Bermuda 1.5%Cayman Islands 0.78%United Kingdom 0.47%By asset type
Stocks 90.19%RA 8.13%What changed recently
- Over the three months to Aug 31, 2026, investors added a net $9.2M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +4.29%, -2.86%, +0.87%.
How it works
ITWO aims to match the Cboe Russell 2000 Daily Covered Call Index, before fees. The index pairs the Russell 2000, a benchmark of smaller US companies, with a covered call strategy. A call option gives its buyer the right to buy at a set price. The seller collects a fee, called a premium, but gives up gains above that price. These options expire after one day, so the trade repeats every trading day.
ProShare Advisors keeps at least 80% of assets in index stocks or in instruments that behave like them. As of August 31, 2026, the fund held 1,958 securities. About 90% was in stocks such as JFrog, Moog, UMB Financial and Glaukos, and no single stock was above 0.32%. About 8% sat in repurchase agreements, which are short-term loans backed by securities. The option side runs mainly through total return swaps with large financial institutions, plus Russell 2000 futures. Swaps add counterparty risk: if a bank fails to pay, the fund can lose money.
The manager picks positions with a mathematical model, not stock research. The fund may hold only a representative sample of the index and stays fully invested in any market. Each month it aims to pay out the index's dividend and option income, after expenses, with a stated minimum yield of 6% a year. Portfolio turnover was 42%.
What it really costs
- ITWO charges 0.55% a year, versus an average of 0.22% for the similar funds below (8th of 9, cheapest first).
- Using the prospectus's standard example, $10,000 invested would cost about $56 in the first year and $689 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| ITWO | $56 | $176 | $307 | $689 |
Structure and tax notes
- Generates much of its income from selling options (directly or through notes). That income is usually taxed as ordinary income rather than as qualified dividends, and the strategy gives up some upside in strong markets.
In a retirement portfolio
ITWO is built to turn small-company stock exposure into high monthly payouts, not to capture the full growth of small caps.
ITWO could serve as an income piece of a portfolio. It yielded 7.5% over the 12 months to October 27, 2026 ($3.25 a share), paid monthly. Option income is usually taxed as ordinary income rather than as qualified dividends. Selling calls also gives up much of the gain in strong rallies, while most of the losses in slumps remain. The fund launched in September 2024, so it has no record from the 2008, 2020 or 2022 downturns. Its only full calendar year, 2025, returned 14.2%. Its deepest price drop was 44.6%, from November 29, 2024 to March 10, 2025, and took about 7.7 months to recover. Anyone selling shares to cover spending during a slide like that would lock in losses. In the SEC's standard example, the 0.55% fee costs $689 over 10 years on $10,000. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want monthly income from US small-company stocks; the trailing yield was 7.5% as of October 27, 2026.
- Those holding it in an IRA or similar account, where option income taxed as ordinary income matters less.
- People comfortable with exposure gained partly through bank swaps, and with a track record that starts on September 4, 2024.
Look elsewhere if
- Cost-focused investors: ITWO's 0.55% fee compares with 0.07% for VTWO, 0.19% for IWM and a 0.22% peer average.
- Those who want the full upside of small caps, since selling call options every day limits gains in sharp rallies.
- Anyone who wants a record through major crashes; ITWO has no 2008, 2020 or 2022 history and fell 44.6% at its worst.
Close alternatives
Matched by holdings overlap from the latest N-PORT reports.
| Fund | Overlap | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| ITWO this fund | — | 0.55% | $197.9M | +15.5% | — |
| VTWO Vanguard Russell 2000 ETF · different strategy | 66% | 0.07% | $17.95B | +15.4% | +21.2% |
| RSSL Global X Russell 2000 ETF · different strategy | 64% | 0.08% | $1.49B | +13.2% | — |
| IWM iShares Russell 2000 ETF · different strategy | 61% | 0.19% | $82.97B | +14.5% | +19.3% |
| BKSE BNY Mellon US Small Cap Core Equity ETF · different strategy | 48% | 0.04% | $87.3M | +14.9% | +21.3% |
| RFLR Innovator U.S. Small Cap Managed Floor ETF · different strategy | 39% | 0.89% | $92.0M | +11.9% | — |
| GSSC TR Activebeta US Small Cap Equity ETF · different strategy | 39% | 0.2% | $1.08B | +15.6% | +20.5% |
| IWO iShares Russell 2000 Growth ETF · different strategy | 39% | 0.24% | $15.43B | +6.0% | +18.8% |
Questions investors ask
Does ITWO pay monthly dividends?
Yes. ITWO aims to pay distributions every month, drawn from the dividends and option premiums earned by its index's daily covered call strategy, after fund expenses. The prospectus sets a minimum yield target of 6% a year. Over the 12 months to October 27, 2026, the fund paid $3.25 a share, a 7.5% trailing yield. Much of this income comes from selling options, so it is usually taxed as ordinary income, not as qualified dividends.
What's the difference between ITWO and IWM?
Both invest in Russell 2000 stocks, and about 61% of their holdings overlap. iShares' IWM simply holds the index. ITWO also sells one-day call options every day to generate income, which limits its gains in strong rallies. ITWO charges 0.55% a year against IWM's 0.19%. Over one year, ITWO returned 15.5% as of October 27, 2026, and IWM returned 15.2% as of October 30. IWM is far larger, with about $83.0 billion in net assets compared with ITWO's $197.9 million.
Is ITWO good for retirement income?
It may suit retirees who want high monthly payouts from small-company stocks and accept the trade-offs. The trailing yield was 7.5% as of October 27, 2026. However, the price can fall sharply: the fund dropped 44.6% from November 2024 to March 2025 and took about 7.7 months to recover. The fund launched in 2024, so it has not been through a major bear market. Its option income is generally taxed as ordinary income, and it costs 0.55% a year.
How does ITWO get such a high yield?
ITWO gets its high yield by selling call options on the Russell 2000 every trading day. Buyers pay a premium for the right to buy at a set price within one day. The fund keeps that premium, plus stock dividends, and passes the income to holders monthly. The cost is that gains above the option's set price go to the buyer, so ITWO can trail plain small-cap funds in strong rallies while still suffering most of the losses.
What is ITWO's expense ratio?
ITWO's expense ratio is 0.55% a year, according to its prospectus filed September 25, 2026, and there is no fee waiver. In the SEC's standard example, a $10,000 investment earning 5% a year would cost $56 after one year, $307 after five years and $689 after ten. That ranks 8th of 9 among similar funds, which average 0.22%. Plain Russell 2000 funds such as VTWO (0.07%) and IWM (0.19%) cost much less.