10-Q: ProShares Trust II Q1 2026 Financial Results

ProShares Trust II reports Q1 2026 financial results for its series of leveraged and inverse exchange-traded funds.

Summary

• The Trust reports financial results for sixteen series of ETFs for the quarter ended March 31, 2026.
• Combined shareholders equity for the Trust was $6.19 billion as of March 31, 2026.
• Combined net income for the quarter was $478.01 million.
• The Funds utilize futures contracts, swap agreements, and forward contracts to achieve daily investment objectives.
• Several Funds underwent share splits or reverse share splits during the period to manage share price levels.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a standard quarterly disclosure for a series of derivative-based ETFs, reflecting expected performance volatility inherent in the funds' strategies.

Positives

• Combined net investment income for the Trust reached $26.54 million for the quarter.
• Several funds, including ProShares Ultra VIX Short-Term Futures ETF and ProShares Ultra Bloomberg Crude Oil, saw significant NAV appreciation during the period.
• The Trust maintains a robust portfolio of short-term U.S. government and agency obligations totaling over $2.2 billion.

Negatives

• Several funds, particularly those with inverse exposure, experienced significant NAV declines due to market movements.
• ProShares UltraShort Silver and ProShares UltraShort Bloomberg Crude Oil saw substantial NAV decreases.
• Total expenses for the Trust increased to $18.07 million for the quarter compared to $10.34 million in the prior year period.

Risks

• Geared funds do not seek to achieve their stated investment objectives over periods longer than a single day due to compounding.
• Market volatility and contango/backwardation in futures markets can significantly impact fund performance.
• Counterparty risk exists for swap agreements and forward contracts, despite collateralization efforts.
• Regulatory changes, including potential restrictions on complex products, could impact investor access.
• Geopolitical conflicts and public health disruptions may cause extreme market volatility and illiquidity.

Future Outlook

The Funds will continue to seek their daily investment objectives through the use of derivatives. The Sponsor notes that results over periods longer than a single day will likely differ significantly from the stated multiples due to compounding and market volatility.

Management Comments

• Management notes that the Geared Funds do not seek to achieve their stated investment objectives over a period of time greater than a single day.
• The Sponsor continues to monitor counterparty creditworthiness and execution quality.
• Management states that all material adjustments necessary for a fair statement of the interim period financial statements have been made.

Industry Context

StockSavvy.ai notes that the Trust operates in the highly competitive and volatile leveraged/inverse ETF space, where performance is heavily dependent on daily rebalancing and the specific behavior of underlying commodity and volatility futures curves.

Comparison to Industry Standards

• The Funds utilize standard industry practices for daily rebalancing of leveraged and inverse products.
• The use of swap agreements and futures contracts is consistent with other major providers of geared commodity and volatility ETFs.
• Expense ratios are generally aligned with industry standards for complex, actively managed derivative-based ETFs.

Corporate Governance

Legal Proceedings

• The Trust is not a party to any material legal proceedings as of March 31, 2026.

Related Party Transactions

• The Funds invest in the ProShares Genius Money Market ETF, an affiliated fund, for cash management purposes.

Stakeholder Impact

• Shareholders in geared funds are subject to significant volatility and potential for loss over periods longer than one day.
• Authorized participants continue to facilitate the creation and redemption of shares.

Next Steps

• Continued daily rebalancing of portfolios to maintain target exposure.
• Ongoing monitoring of counterparty credit risk.
• Preparation for future regulatory requirements regarding complex products.

Key Dates

Keywords

ProShares, ETF, Leveraged ETF, Inverse ETF, VIX, Commodity Futures, Financial Derivatives, SEC Filing