ProShares Long Online/Short Stores ETF (CLIX) seeks to provide returns that correspond to the performance of the ProShares Long Online/Short Stores Index, which takes long positions in online retail companies while simultaneously shorting traditional brick-and-mortar retail stores. This pairs trading strategy aims to profit from the ongoing shift from physical to digital commerce.
How It Works
CLIX employs a market-neutral pairs trading approach, maintaining approximately equal dollar amounts in long and short positions. The fund goes long on online retailers like Amazon and e-commerce platforms while shorting traditional retailers such as department stores and mall-based chains. Portfolio rebalancing occurs monthly to maintain target exposures and sector neutrality. This active strategy seeks to isolate the performance differential between online and offline retail segments rather than broad market direction.
Key Features
- Market-neutral design reduces broad equity market exposure, focusing purely on the online versus offline retail performance differential
- Provides targeted exposure to secular e-commerce growth trend while hedging against traditional retail decline
- Zero expense ratio makes this pairs trading strategy accessible without typical hedge fund fee structures
Risks
- This ETF can lose value if traditional retail stocks outperform online retailers, reversing the expected secular trend temporarily or permanently
- Short positions create unlimited loss potential if brick-and-mortar retail stocks surge unexpectedly due to value rotations or turnaround stories
- Pairs trading complexity and daily rebalancing costs can erode returns during periods when the online/offline performance spread narrows significantly
Who Should Own This
Best suited as a tactical satellite holding (2-5% allocation) for sophisticated investors with high risk tolerance and 1-3 year time horizons. Requires understanding of short selling mechanics and pairs trading strategies. Ideal for investors seeking to profit from retail sector disruption while maintaining market neutrality during uncertain equity market conditions.