ProShares Ultra S&P 500 Equal Weight (URSP) seeks to deliver twice (2x) the daily performance of the S&P 500 Equal Weight Index, which assigns equal dollar amounts to all 500 S&P 500 companies regardless of market capitalization. This leveraged equity ETF provides amplified exposure to large-cap U.S. stocks with equal weighting rather than traditional market-cap weighting.
How It Works
URSP uses derivatives including swaps and futures contracts to achieve 200% daily exposure to its underlying index through mathematical leverage rather than borrowing. The fund rebalances daily to maintain its 2x target, resetting the leverage ratio each trading day. Unlike market-cap weighted S&P 500 funds, the equal-weight approach gives smaller companies like Comerica the same influence as Apple. Holdings are rebalanced quarterly to maintain equal dollar allocations across all 500 constituents.
Key Features
- Provides 2x daily leverage to equal-weight S&P 500, amplifying both gains and losses compared to traditional market-cap weighted exposure
- Equal weighting reduces concentration risk by limiting mega-cap influence, giving mid-cap S&P 500 stocks proportionally higher allocations
- Daily rebalancing maintains precise 2x exposure but creates compounding effects that diverge from 2x long-term underlying index performance
Risks
- Daily reset causes compounding decay—if S&P 500 Equal Weight drops 10% then rises 10%, URSP does not return to break-even due to leverage mathematics
- This ETF can lose 60-80% in severe bear markets due to 2x amplification, with volatility decay accelerating losses during choppy sideways markets
- Equal weighting can underperform during periods when mega-cap stocks like Apple and Microsoft drive market returns, reducing relative performance versus cap-weighted alternatives
Who Should Own This
Designed for active traders with high risk tolerance seeking short-term (hours to days, maximum few weeks) amplified exposure to equal-weighted large-cap U.S. stocks. Requires daily monitoring and strict position sizing (typically 1-5% of portfolio). Unsuitable for buy-and-hold investors due to volatility decay over extended periods.