Is UVXY a good ETF to invest in?

``` The deep research logic is organized as follows: Okay, let's tackle the question: "Is UVXY a good ETF to invest in?" First, I need to gather all the relevant data from the provided references and background. Starting with the basics, UVXY is the ProShares Ultra VIX Short-Term Futures ETF. From the references, I see that it's designed to provide 1.5x daily leverage to the S&P 500 VIX Short-Term Futures Index . The expense ratio is 0.95%, which is a bit high but not uncommon for leveraged ETFs . Looking at performance data, the short-term returns are negative. The 1-week change is -2.61%, 1-month is -19.09%, 3-month is -47.51%, 1-year is -40.81%, and 3-year is a whopping -97.08% . These numbers are pretty concerning, especially the long-term drop. It suggests that UVXY has been performing poorly, likely due to the nature of VIX futures and contango risks . The top holdings are almost entirely in VIX futures contracts for August and September 2025, with weights of 105.07% and 44.91% respectively . This high concentration in futures could lead to significant volatility and roll yield issues, which are common in VIX ETFs . AUM is around $641.54 million, with 42.9 million shares outstanding and a 30-day average daily volume of 18.25 million shares . The liquidity seems decent, but the high turnover might affect performance, especially with the leveraged nature of the ETF . Institutional activity shows some buying, like Cantor Fitzgerald and Personal CFO Solutions increasing their stakes . However, the recent price drops and high options trading activity might indicate bearish sentiment or speculative interest. The ETF's purpose is for short-term hedging against market volatility, not long-term holding . Given the user's profile focusing on long-term growth and blue-chip stocks, UVXY might not align well with their goals. The high expense ratio and poor historical performance could be drawbacks for a long-term strategy. Also, the user prefers stocks with strong fundamentals and bullish patterns. UVXY's performance doesn't fit that profile; it's more of a tactical tool for volatility trading rather than a buy-and-hold asset. The regulatory filings mention no recent updates, so there's no new information that changes the risk profile . In conclusion, while UVXY has its niche use cases, it doesn't seem suitable for the user's stated investment preferences. The high risk, poor long-term returns, and speculative nature make it a less ideal choice compared to their usual focus on stable, growth-oriented stocks. ``` ### Conclusion 🎯 **UVXY (ProShares Ultra VIX Short-Term Futures ETF)** is **not recommended** for long-term investment due to its high risk, poor historical performance, and speculative nature. However, it can serve as a tactical tool for short-term volatility hedging or speculation under specific market conditions. --- ### Analysis 📊 #### 1. **Performance & Risk** | Metric | 1-Week | 1-Month | 3-Month | 1-Year | 3-Year | |------------------------|--------|---------|---------|--------|--------| | **Percentage Change** | -2.61% | -19.09% | -47.51% | -40.81% | -97.08% | - **Key Takeaway**: UVXY has suffered significant losses across all timeframes, especially long-term (-97.08% over 3 years). This reflects the challenges of maintaining leveraged exposure to VIX futures, which are prone to **contango** (when futures prices rise faster than spot prices) . - **Risk Warning**: The ETF’s 1.5x leverage amplifies both gains and losses, making it highly volatile and unsuitable for risk-averse investors. --- #### 2. **Fundamentals** | Metric | Value | |------------------------|----------------| | **Expense Ratio** | 0.95% | | **AUM** | $641.54M | | **Daily Volume** | 18.25M shares | - **Key Takeaway**: While the ETF has decent liquidity (high trading volume), its high expense ratio and concentrated holdings (99.98% in VIX futures ) limit its appeal. The lack of diversification increases exposure to market volatility shocks. --- #### 3. **Market Sentiment & Usage** - **Institutional Activity**: Recent buying from Cantor Fitzgerald (+$92K) and Personal CFO Solutions (+14.9% stake ). - **Options Trading**: Unusual put option activity (+25% to +45% volume spikes ), suggesting bearish bets on UVXY. - **Key Takeaway**: The ETF is primarily used by institutional traders for short-term speculation rather than long-term holding. Retail investors should exercise caution due to its complexity and high risk. --- #### 4. **Strategic Fit** - **Purpose**: Designed for **short-term volatility hedging** (e.g., protecting against market crashes) . - **Limitations**: Poor track record for long-term growth (-97.08% over 3 years ) and high expense ratio (0.95% ). - **Comparison**: Outperformed by competing VIX ETFs like SVXY (inverse VIX) in recent years . --- ### Final Thoughts 🧠 UVXY is a **high-risk, high-reward** ETF best suited for experienced traders seeking tactical exposure to market volatility. For long-term investors with a preference for stable, growth-oriented stocks (as per your profile), UVXY is not ideal. Consider alternatives like **low-cost index ETFs** (e.g., SPY, VOO) or **sector-specific ETFs** with better fundamentals and lower risk profiles.