Investor Alert! NYSEArca: TBT Losses?

ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT) Losses?

Did your broker or advisor sell you ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT). Apparently, TBT is a leveraged fund whose goal is to produce daily investment results of two times the inverse of the performance of the ICE U.S. Treasury 20+ Year Bond Index in one day. It appears that TBT, which has more than $916,000,000 in net assets, is mainly meant for investors trying to hedge against declines or even profit from market declines.
As of market close on July 23, 2019, TBT has a 52-week high of $41.70 and 52-week low of $28.21. With TBT closing at $29.56 on July 23, 2019, TBT is down more than 28% from its 52-week high.
Proshares’ TBT uses ICE U.S. Treasury 20+ Year Bond Index as its benchmark. This Index contains U.S. Treasuries with remaining maturities of more than 20 years and at least $300,000,00 in face value except amounts which the Federal Reserve withholds. Significantly, investors’ returns in TBT can greatly fluctuate if held for more than one day. Indeed, for periods exceeding a single day, TBT will lose money if the Index is flat. Also, the prospectus says that the Fund could take a loss in situations where the Index falls.

Suitability Issues With Investments Such As TBTs

Evidently, ProShares claims it can help investors manage risk and “enhance returns” through its alternative investments. It appears that this is not the case for TBT given its poor performance. In fact, TBT’s noticeable decline in price makes investors question whether it was suitable for their broker or advisor to sell them TBT. Also, some investors presumably question whether their broker or adviser fully disclosed the facts or made misrepresentations about the Fund.
Moreover, investments like TBT can contain a substantial increase in risk compared with traditional investments. Mainly, the higher index volatility, longer holding periods, greater leverage, and inverse exposure could aggravate the impact of compounding on returns. Therefore, it is generally unsuitable for brokers to sell these investments to non-active investors or those with long-term investment horizons.

Investors Sue ProShares For False Statements, Non-Disclosures

Speaking of misrepresentation, in January 2019, investors pursued a class action lawsuit #19-CV-00886 against ProShares Capital Management LLC and ProShares Trust II over VIX Short-Term Futures ETF (NYSEArca: SVXY). Allegedly, Proshares violated Securities Act of 1934 and Securities Act of 1933 by making false and misleading statements regarding the Fund. Apparently, the SVXY’s objective is to match the inverse of the daily performance of the S&P 500 VIX Short-Term Futures Index. Supposedly, investors were left in the dark about SVXY having a flawed design and being exposed to drastic losses. This matter is ongoing.

Did your broker sell you ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT)? If so, contact Soreide Law Group at (888) 760-6552. You’ll be able to speak with experienced counsel about a possible recovery of your investment losses. Notably, Soreide Law Group has recovered millions of dollars for investors who have suffered losses due to broker and brokerage firm misconduct. We represent clients on a contingency fee basis and advance all costs.