10-K: ProShares Trust II Reports Mixed 2025 Performance

ProShares Trust II, managing a suite of leveraged and inverse ETFs, reported a significant increase in combined net income for 2025, driven by strong realized and unrealized gains, despite varied performance across individual funds.

Summary

• ProShares Trust II, a Delaware statutory trust, operates sixteen separate series (Funds) offering leveraged, inverse, or matching daily performance targets for various benchmarks including VIX futures, crude oil, natural gas, gold, silver, Euro, and Japanese Yen.
• The Trust's combined net income for the year ended December 31, 2025, was $1,711,915,524, a substantial improvement from a net loss of $39,371,749 in 2024.
• Combined net realized and unrealized gains on investment activity surged to $1,620,485,059 in 2025, compared to a loss of $142,820,578 in 2024.
• Total assets for the combined Trust increased to $6,062,940,882 in 2025 from $3,151,924,172 in 2024, while shareholders' equity rose to $5,724,069,329 from $3,025,133,601.
• Individual fund performance varied significantly: ProShares Ultra Silver saw a 364.7% increase in NAV per share, and ProShares Ultra Gold increased by 139.3%.
• Conversely, ProShares Ultra VIX Short-Term Futures ETF experienced a 65.5% decrease in NAV per share, and ProShares Ultra Bloomberg Natural Gas decreased by 58.9%.
• The expense ratio for most funds, excluding brokerage commissions and futures account fees, remained at 0.95% (0.85% for Matching VIX Funds).
• Several share splits and reverse splits were executed across various funds in 2023, 2024, and 2025, which did not change the aggregate net asset value of shareholders' investments.
• The Trust's cybersecurity management program is based on the NIST Cybersecurity Framework and is integrated into the Sponsor's enterprise risk management system, with regular assessments and employee training.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing as moderately positive due to the significant turnaround in combined net income and overall asset growth for the Trust. However, the highly volatile and often negative performance of several individual leveraged/inverse funds, coupled with inherent compounding risks, tempers overall enthusiasm.

Positives

• Combined net income for ProShares Trust II significantly improved to $1,711,915,524 in 2025 from a net loss of $39,371,749 in 2024.
• Combined net realized and unrealized gains on investment activity showed a strong positive reversal, reaching $1,620,485,059 in 2025 compared to a loss of $142,820,578 in 2024.
• ProShares Ultra Silver experienced a substantial 364.7% increase in NAV per share for the year ended December 31, 2025, driven by a 138.6% rise in its benchmark.
• ProShares Ultra Gold saw a significant 139.3% increase in NAV per share, corresponding to a 62.5% rise in its benchmark.
• ProShares Ultra Euro's NAV per share increased by 25.9% due to an appreciation in the euro versus the U.S. dollar.
• ProShares UltraShort Bloomberg Crude Oil's NAV per share increased by 16.0% due to a decrease in WTI Crude Oil value, aligning with its inverse objective.
• ProShares UltraShort Yen's NAV per share increased by 6.9% due to an increase in the Japanese yen value, aligning with its inverse objective.
• ProShares VIX Mid-Term Futures ETF's NAV per share increased by 5.0%, reflecting an appreciation in its benchmark.
• The Funds maintained a high statistical correlation (over 0.99) to their respective daily performance benchmarks, indicating effective tracking by the Sponsor.

Negatives

• ProShares Ultra VIX Short-Term Futures ETF experienced a significant 65.5% decrease in NAV per share for the year ended December 31, 2025, due to a greater depreciation in asset value and a 41.6% decline in its benchmark.
• ProShares Ultra Bloomberg Natural Gas saw a substantial 58.9% decrease in NAV per share, despite a lesser decline in its benchmark, indicating the impact of compounding and volatility.
• ProShares Ultra Bloomberg Crude Oil's NAV per share decreased by 29.8% due to a depreciation in asset value and a 14.2% decline in its benchmark.
• ProShares UltraShort Gold's NAV per share decreased by 63.0% due to a greater depreciation in asset value, despite its inverse objective, highlighting the impact of compounding and volatility.
• ProShares UltraShort Silver's NAV per share decreased by 87.5% due to a greater depreciation in asset value, despite its inverse objective, highlighting the impact of compounding and volatility.
• ProShares Short VIX Short-Term Futures ETF's NAV decreased by 8.9% and per share NAV increased by 10.9%, but its net income decreased significantly from $37,993,782 in 2024 to $62,277,962 in 2025, primarily due to greater decrease in futures prices.
• The use of leveraged and/or inverse leveraged positions could result in the total loss of an investor's investment within a single day, especially with single-day movements in the benchmark approaching 50% contrary to the fund's objective.
• Geared Funds are subject to increased trading costs associated with daily portfolio rebalancings.

Risks

• Returns of Geared Funds over periods longer than a day will likely differ significantly from the Funds daily target due to compounding and volatility.
• Correlation risks specific to Geared Funds may arise from daily rebalancing and imperfect correlation between Financial Instruments and benchmarks.
• The use of leveraged, inverse, and/or inverse leveraged positions could result in the total loss of an investor's investment within a given day.
• Intraday price/performance of Geared Funds will likely differ from the Funds stated daily multiple times the performance of its Benchmark for such day.
• Currency Funds are subject to risks impacting non-U.S. currencies, including political, economic, and financial events, and potential abandonment of the euro by member countries.
• Precious Metals Funds do not hold physical gold or silver bullion, relying on Financial Instruments which may cause tracking error and subject them to contango and backwardation.
• Natural Gas Funds and Oil Funds are linked to futures contracts, not spot prices, which may perform very differently from the underlying physical commodities.
• Extraordinary contango, as seen in crude oil futures in April 2020, could lead to negative prices and total loss of investment for long positions.
• VIX Funds are benchmarked to VIX Futures Indexes, not the VIX or actual realized S&P 500 volatility, and are expected to perform very differently from the VIX.
• VIX futures contracts can be highly volatile, leading to sudden and large losses.
• The VIX has historically reverted to a long-term mean, limiting appreciation over extended periods.
• Changes to the methodology and calculation of the VIX by CBOE could affect VIX futures contracts and Fund values.
• There is no guarantee that a Fund will achieve its investment objective or that returns will correlate to the index times its stated multiple.
• Assets invested in can be highly volatile, leading to large losses.
• Funds seek to achieve objectives even when benchmark performance is flat or causes NAV to decline.
• Fluctuations in the price of Financial Instruments or assets could materially adversely affect an investment.
• Margin requirements and position limits may limit a Fund's ability to achieve sufficient exposure.
• Possible illiquid markets may cause or exacerbate losses, especially for large positions.
• Funds may be subject to significant and sustained losses from rolling futures positions (contango/backwardation).
• It may not be possible to gain exposure to benchmarks using exchange-traded Financial Instruments in the future.
• Fees are charged regardless of a Fund's returns and may result in asset depletion.
• Changes by benchmark providers affecting composition and valuation could adversely affect Fund Shares.
• A particular benchmark may underperform other asset classes or other indices based on the same underlying Reference Asset.
• Funds may be subject to counterparty risks, especially with uncleared OTC derivatives.
• Financial markets may be subject to unusual trading activity, volatility, fraud, and/or manipulation by third parties.
• Regulatory changes or actions, including new legislation (e.g., Dodd-Frank Act, potential FINRA restrictions), may alter operations and profitability.
• Investors cannot be assured of the Sponsor's continued services, which could be detrimental to the Funds.
• Lack of active trading markets for Shares may result in losses at disposition.
• A Fund may change its investment objective, benchmark, or strategies, or may liquidate, at any time without shareholder approval.
• Redemption or creation orders may be postponed, suspended, or rejected under certain circumstances.
• The NAV per Share may not correspond to the market price per Share.
• Investors may be adversely affected by an overstatement or understatement of a Fund's NAV due to valuation methods or errors.
• Regulatory and exchange position limits or accountability levels may restrict Creation Units and Trust operations.
• Purchases of Creation Units by Authorized Participants may be limited or suspended by the Sponsor.
• The number of underlying components in a Fund's benchmark may impact volatility.
• Liquidity of Shares may be affected by withdrawal of Authorized Participants.
• Shareholders not Authorized Participants may only trade in secondary markets, which can adversely affect investments.
• The applicable Exchange may halt trading in Shares, impacting ability to sell.
• Shareholders do not have protections associated with ownership in a 1940 Act registered investment company.
• Shareholders have limited voting and distribution rights.
• Value of Shares will be adversely affected if Funds must indemnify Wilmington Trust Company (Trustee) and/or the Sponsor.
• Bankruptcy of a Fund could increase a shareholder's liability beyond their initial investment.
• Failure of FCMs to segregate assets may increase losses.
• A court could conclude that assets/liabilities of one Fund are not segregated from another, exposing assets to other Fund liabilities.
• Cyber-attacks pose operational and information security risks.
• Trading on exchanges outside the U.S. is generally not subject to U.S. regulation, potentially diminishing investor protections.
• Competing claims of intellectual property rights may affect the Funds.
• Shareholders' tax liability may exceed cash distributions.
• The IRS could adjust or reallocate tax items if assumptions/conventions are not accepted.
• Shareholders receive Schedule K-1, increasing tax return complexity.
• Shareholders may recognize significant ordinary income and short-term capital gain.
• A Fund could be treated as a corporation for federal income tax purposes, substantially reducing Share value.
• Changes in U.S. federal income tax law could affect an investment in Shares.
• Public health issues, war, military conflicts (e.g., Russia-Ukraine, Israel-Hamas), sanctions, acts of terrorism, sustained elevated inflation, and supply chain issues could negatively impact global financial markets.

Future Outlook

The forward-looking statements in the filing are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, including geopolitical conflicts, world health crises, global economic markets, rising interest rates, regulatory and exchange limits, and market competition. The Funds' actual results may differ materially from those expressed in forward-looking statements, and neither the Trust nor the Sponsor assumes responsibility for updating these statements.

Management Comments

• The Sponsor uses a mathematical approach to investing, determining the type, quantity, and mix of Financial Instruments to produce returns consistent with a Fund's objective or Daily Target.
• Funds are not actively managed by traditional methods based on judgments relating to economic, financial, and market conditions.
• Each Fund seeks to remain fully invested at all times in Financial Instruments and money market instruments that provide exposure to its underlying benchmark consistent with its investment objective, without regard to market conditions, trends, or direction.

Industry Context

StockSavvy.ai notes that the performance of ProShares Trust II's various leveraged and inverse ETFs highlights the inherent volatility and complexity of derivative-based investment products. The significant divergence in performance across different commodity and volatility benchmarks underscores the importance of specific market conditions for each underlying asset. The VIX-linked funds, in particular, demonstrate the challenges of tracking volatility indices, which often underperform the spot VIX. The strong performance of precious metals funds (Ultra Gold, Ultra Silver) in 2025 suggests a favorable market environment for these commodities, while the declines in natural gas and VIX-related funds reflect adverse market movements and the amplified effects of leverage and compounding in those sectors. The ongoing regulatory scrutiny of 'complex products' like leveraged ETFs, as noted by FINRA, indicates a potential for future industry-wide changes that could impact product offerings and investor access.

Comparison to Industry Standards

• The Funds' daily performance consistently achieved a statistical correlation over 0.99 to their respective daily benchmarks, indicating strong tracking efficiency for their stated daily objectives, which is a key performance metric for leveraged/inverse ETFs.
• The expense ratios, excluding brokerage commissions and futures account fees, are consistently 0.95% for most Geared Funds and 0.85% for Matching VIX Funds, which are within the typical range for specialized leveraged/inverse ETF products, though higher than passively managed broad-market ETFs.
• The significant underperformance of some Geared Funds (e.g., Ultra VIX Short-Term Futures ETF, Ultra Bloomberg Natural Gas) over periods longer than a single day, despite high daily correlation, is a known characteristic of leveraged/inverse products due to compounding, and is consistent with industry warnings for these types of funds.
• The performance of precious metals funds (Ultra Gold, Ultra Silver) in 2025, with NAV per share increases of 139.3% and 364.7% respectively, reflects a strong bull market for these commodities, potentially outperforming unleveraged counterparts in the same period, but also exposing them to greater downside risk in adverse conditions.

Corporate Governance

Related Party Transactions

• The Sponsor (ProShare Capital Management LLC) receives a monthly Management Fee from each Fund (0.95% annually for Geared Funds, 0.85% for Matching VIX Funds) for trading advisory and other services, including paying routine operational and administrative expenses.
• ProFunds Distributors, Inc., an affiliated broker-dealer of the Sponsor, is compensated by the Sponsor for distribution services.
• Certain Funds of ProShares Trust II began investing a portion of their available cash balances in the ProShares GENIUS Money Market ETF (IQMM), an exchange-traded fund sponsored and advised by ProShare Advisors LLC, which is the Sponsor of the Trust.

Stakeholder Impact

• Shareholders: Experience significant gains in some commodity-linked funds (Gold, Silver) but substantial losses in others (VIX, Natural Gas), highlighting the high-risk, high-reward nature of these leveraged/inverse products. They are subject to compounding effects over longer holding periods and potential tax implications from fractional share redemptions due to reverse splits.
• Authorized Participants: Continue to play a crucial role in creation and redemption of Creation Units, paying transaction fees. Their ability to arbitrage helps keep market prices aligned with NAV, but their withdrawal could impact liquidity.
• Sponsor (ProShare Capital Management LLC): Benefits from increased management fees due to higher NAVs in some funds, but also bears the responsibility for managing complex derivative portfolios and ensuring compliance with extensive regulatory requirements.
• Regulators (SEC, CFTC, FINRA): Maintain oversight over the Trust's operations and financial reporting, with ongoing scrutiny of complex products potentially leading to future regulatory changes impacting the industry.

Next Steps

• ProShares UltraShort Silver will undergo a 1-for-10 reverse share split effective February 26, 2026.
• Post-Reverse Split fractional shares for ProShares UltraShort Silver will be redeemed for cash and sent to shareholders' brokers of record.
• Certain Funds of ProShares Trust II will begin investing a portion of their available cash balances in the ProShares GENIUS Money Market ETF (IQMM), which commenced operations in February 2026.

Key Dates

Recommendation

The filing presents a mixed bag of results. While the combined Trust shows a strong turnaround in net income and significant asset growth, this is largely driven by a few high-performing commodity funds. Many individual leveraged and inverse funds, particularly those linked to VIX and natural gas, experienced substantial NAV per share declines, underscoring the inherent volatility and compounding risks. The high correlation to daily benchmarks is positive for tracking, but the long-term performance deviations are a critical consideration for investors. Given the highly specialized and volatile nature of these products, and the varied performance across the underlying assets, a 'hold' recommendation is appropriate for existing investors who understand the risks and actively monitor their positions. New investors should exercise extreme caution and conduct thorough due diligence before considering an investment, as these are not suitable for all portfolios.

Keywords

Leveraged ETFs, Inverse ETFs, Commodity Futures, VIX Futures, Crude Oil Futures, Natural Gas Futures, Gold Futures, Silver Futures, Euro Currency, Japanese Yen, SEC Filing, 10-K, Financial Instruments, Swap Agreements, Forward Contracts, Daily Target, Compounding Risk, Contango, Backwardation, Exchange Traded Funds, ProShares