10-Q: ProShares Trust II Reports Strong Q3 2025 Financials

ProShares Trust II reports a significant increase in net income and shareholder equity for the nine months ended September 30, 2025, driven by substantial realized and unrealized gains across its diverse range of leveraged and inverse ETFs.

Summary

• ProShares Trust II reported a net income of $674,838,949 for the nine months ended September 30, 2025, a substantial improvement from a net loss of $3,109,391 in the same period of 2024.
• Total assets increased to $4,621,603,935 as of September 30, 2025, up from $3,151,924,172 at December 31, 2024.
• Shareholders' equity grew to $4,520,549,078 as of September 30, 2025, compared to $3,025,133,601 at December 31, 2024.
• Net realized gains on investments were $308,969,476 for the nine months ended September 30, 2025, a significant turnaround from net realized losses of $301,922,238 in the prior year period.
• Change in net unrealized appreciation on investments was $301,161,156 for the nine months ended September 30, 2025, up from $220,944,200 in the prior year period.
• Net investment income for the combined trust decreased to $64,708,317 for the nine months ended September 30, 2025, from $77,868,647 in the prior year period.
• Several individual funds experienced strong NAV performance, including Ultra Gold (+95.7%), Ultra Silver (+125.4%), and Ultra Euro (+26.4%) for the nine months ended September 30, 2025.
• Other funds, such as Ultra VIX Short-Term Futures ETF (-49.7%) and UltraShort Gold (-52.3%), experienced significant NAV depreciation during the same nine-month period.

Sentiment

Score: 7

Explanation: The overall financial performance for the combined trust shows a strong positive turnaround in net income and significant growth in assets and equity. While individual fund performances are mixed, the aggregate results are substantially better than the prior year, indicating effective management of the diverse portfolio despite market challenges.

Positives

• Combined Trust net income surged to $674,838,949 for the nine months ended September 30, 2025, from a loss of $3,109,391 in the prior year.
• Net realized gains on investments significantly improved to $308,969,476, reversing a substantial loss from the previous year.
• Total assets increased by approximately 46.6% to $4.62 billion, and shareholders' equity increased by approximately 49.4% to $4.52 billion.
• ProShares Ultra Gold saw a 95.7% increase in Net Asset Value (NAV) per share for the nine months ended September 30, 2025.
• ProShares Ultra Silver experienced a 125.4% increase in NAV per share for the nine months ended September 30, 2025.
• ProShares Ultra Euro recorded a 26.4% increase in NAV per share for the nine months ended September 30, 2025.
• ProShares Ultra Yen showed a 7.6% increase in NAV per share for the nine months ended September 30, 2025.
• ProShares UltraShort Bloomberg Crude Oil achieved a 3.4% increase in NAV per share for the nine months ended September 30, 2025.
• ProShares VIX Mid-Term Futures ETF reported a 9.1% increase in NAV per share for the nine months ended September 30, 2025.

Negatives

• Combined Trust net investment income decreased to $64,708,317 for the nine months ended September 30, 2025, from $77,868,647 in the prior year.
• ProShares Ultra Bloomberg Crude Oil experienced an 18.6% decrease in NAV per share for the nine months ended September 30, 2025.
• ProShares Ultra Bloomberg Natural Gas saw a 46.2% decrease in NAV per share for the nine months ended September 30, 2025.
• ProShares Ultra VIX Short-Term Futures ETF recorded a 49.7% decrease in NAV per share for the nine months ended September 30, 2025.
• ProShares UltraShort Euro experienced a 19.7% decrease in NAV per share for the nine months ended September 30, 2025.
• ProShares UltraShort Gold saw a 52.3% decrease in NAV per share for the nine months ended September 30, 2025.
• ProShares UltraShort Silver recorded a 63.5% decrease in NAV per share for the nine months ended September 30, 2025.
• ProShares UltraShort Yen experienced a 6.6% decrease in NAV per share for the nine months ended September 30, 2025.
• ProShares VIX Short-Term Futures ETF saw a 28.6% decrease in NAV per share for the nine months ended September 30, 2025.

Risks

• Correlation and Holding Period Risk: Geared Funds do not seek to achieve their stated investment objectives over periods longer than a single day, and actual returns will likely differ significantly due to mathematical compounding and benchmark volatility.
• Market disruptions or closure, large asset flows, regulatory restrictions, and extreme market volatility can adversely affect a Fund's ability to adjust exposure and achieve its investment objective.
• Increased trading costs are associated with daily portfolio rebalancing for Geared Funds to maintain appropriate exposure to underlying benchmarks.
• Counterparty Risk: Funds are exposed to the credit risk of counterparties to derivatives (swap and forward contracts), especially for uncleared OTC derivatives, potentially leading to significant losses if a counterparty defaults.
• Leverage Risk: The use of leveraged positions (e.g., -2x, 1.5x, 2x multipliers) increases the risk of total loss, even from single-day movements in the benchmark contrary to the fund's objective.
• Liquidity Risk: Financial Instruments may not always be liquidated at desired prices, and market disruptions can make it difficult to exit positions, potentially causing losses, especially for large or concentrated positions.
• Contango and Backwardation Risk: The rolling of futures contracts can have a significant positive or negative impact on performance, particularly in extreme market conditions, potentially leading to substantial losses or even total loss of investment.
• Natural Disasters and Public Health Disruptions: Events like pandemics (e.g., COVID-19) and geopolitical conflicts (e.g., Russia-Ukraine, Israel-Hamas) can cause extreme market volatility, illiquidity, and operational disruptions, negatively impacting fund performance.
• Risks Related to Trade Disputes: Global trade disputes, tariffs, and retaliatory actions can adversely affect economies, currency exchange rates, and investor confidence.
• Risk of Government Regulation: Potential future FINRA regulations on 'complex products' could prevent or restrict investors from buying shares in leveraged and inverse leveraged funds.

Future Outlook

The filing contains standard forward-looking statements acknowledging inherent uncertainties, risks, and changes in circumstances that are difficult to predict. It highlights risks related to geopolitical conflict, world health crises, rising interest rates, regulatory limits, and market competition. No specific financial guidance or projections are provided, and the Trust, Sponsor, Trustee, and Administrator disclaim any duty to update these statements.

Industry Context

The results reflect the highly specialized nature of leveraged and inverse ETFs, which aim for daily investment results corresponding to multiples or inverses of benchmarks. The mixed performance across individual funds underscores the impact of market volatility and specific commodity/currency trends on these products. The mention of potential FINRA regulation on 'complex products' indicates ongoing scrutiny within the industry regarding the suitability of such funds for retail investors, which could impact future product offerings and accessibility.

Comparison to Industry Standards

• The daily performance of each fund had a statistical correlation over 0.99 to its respective benchmark's daily performance, indicating effective tracking of their stated daily objectives.
• The expense ratios for most funds, excluding brokerage commissions and futures account fees, were consistently 0.95% (or 0.85% for Matching VIX Funds), which is a standard management fee structure for these types of specialized ETFs.
• The filing does not provide specific comparisons to other comparable companies, projects, or global benchmarks beyond the internal fund-to-benchmark performance metrics.

Legal Proceedings

• As of September 30, 2025, the Trust is not a party to any material legal proceedings.

Related Party Transactions

• Management fees are paid to ProShare Capital Management LLC (the Sponsor) based on a percentage of each Fund's average daily NAV (0.95% for Leveraged/Geared VIX Funds, 0.85% for Matching VIX Funds).
• The Sponsor pays all routine operational, administrative, and other ordinary expenses of each Fund from the Management Fee.
• BNY Mellon serves as Administrator, Custodian, and Transfer Agent, with fees paid by the Sponsor.
• SEI Investments Distribution Co. serves as Distributor, with fees paid by the Sponsor.
• The Sponsor is currently paying brokerage commissions on VIX futures contracts for the Matching VIX Funds that exceed variable create/redeem fees collected by more than 0.02% of the Matching VIX Funds average net assets annually.
• Certain counterparties to swap agreements and foreign currency forward contracts may also be Authorized Participants or shareholders of a Fund.

Stakeholder Impact

• Shareholders of funds with positive NAV performance (e.g., Ultra Gold, Ultra Silver) experienced significant appreciation in their investments.
• Shareholders of funds with negative NAV performance (e.g., Ultra VIX Short-Term Futures ETF, UltraShort Gold) experienced significant depreciation in their investments.
• Shareholders holding fractional shares after the upcoming reverse splits for UltraShort Gold and Ultra VIX Short-Term Futures ETF will have those redeemed for cash, which may trigger taxable gains or losses.
• Authorized Participants continue to facilitate creation and redemption units, subject to transaction fees.
• The Sponsor benefits from management fees, which cover most operational expenses, and from the overall growth in assets under management.

Next Steps

• ProShares UltraShort Gold will execute a 1-for-2 reverse share split effective prior to market open on November 20, 2025.
• ProShares Ultra VIX Short-Term Futures ETF will execute a 1-for-5 reverse share split effective prior to market open on November 20, 2025.

Key Dates

Keywords

Leveraged ETFs, Inverse ETFs, Commodity Futures, VIX Futures, Foreign Currency Forwards, Financial Instruments, SEC Filing, Quarterly Report, Investment Performance, Market Risk, Counterparty Risk, Liquidity Risk, Share Splits