ProShares Trust II Reports Financial Performance for Year Ended December 31, 2024

ProShares Trust II (the “Trust”), a Delaware statutory trust formed in 2007, reported its financial performance for the year ended December 31, 2024, in its recent 10-K filing. The Trust operates sixteen separate series, or funds, offering common units of beneficial interest (Shares) representing fractional ownership in each respective fund. Shares of most funds are listed on NYSE Arca, while the VIX funds trade on the Cboe BZX Exchange. The filing notes the liquidation of two funds, ProShares UltraShort Australian Dollar ETF and ProShares Short Euro ETF, completed on May 12, 2022, with proceeds distributed to shareholders. The Trust itself employs no staff.

The 10-K details the financial performance of each fund, including net asset values (NAVs), shares outstanding, and net income (loss). Significant variations in performance are noted between the 2024 and 2023 fiscal years for several funds, largely attributed to changes in the underlying benchmarks (e.g., Bloomberg Commodity Balanced WTI Crude Oil Index, S&P 500 VIX Short-Term Futures Index, spot prices of various currencies) and the cumulative effect of the funds' daily investment strategies (leveraged, inverse, or inverse leveraged). Specific figures for NAVs, shares outstanding, and net income/loss are provided for each fund, along with percentage changes compared to the prior year. The filing also highlights the impact of share splits and reverse share splits on share prices and outstanding shares, emphasizing that these actions did not alter the aggregate net asset value of shareholder investments.

The Trust's 10-K filing extensively addresses risk factors, including those specific to geared funds (leveraged, inverse, or inverse leveraged), currency funds, commodity funds, and VIX funds. These risks encompass the potential for total loss of investment within a single day due to leverage and volatility, imperfect correlation between fund performance and benchmark performance, counterparty risk, liquidity risk, and the impact of rolling futures positions. The document also discusses risks related to all funds, such as the potential for underperformance relative to benchmarks, fees and expenses, regulatory changes, and cybersecurity threats. The filing includes detailed explanations of the investment strategies and benchmarks for each fund, along with information on the licensing agreements with index providers like Bloomberg and S&P.

Operational developments included the creation and redemption of shares, primarily conducted by authorized participants in blocks of 50,000 (geared funds) or 25,000 (Matching VIX funds) shares. The filing outlines the procedures for creation and redemption, including cutoff times, payment methods, and the potential for suspension or rejection of orders. The document also details the fees and expenses associated with these transactions, including management fees paid to the Sponsor (ProShares Capital Management LLC), licensing fees, and routine operational expenses. The Sponsor's role in managing the funds, selecting service providers, and overseeing investment strategies is clearly defined.

The Trust's 10-K filing concludes with financial statements for each fund and the combined Trust, including statements of financial condition, statements of operations, statements of changes in shareholders' equity, and statements of cash flows. These statements provide detailed quantitative information on the Trust's and each fund's financial performance. The filing also includes the report of the independent registered public accounting firm, PricewaterhouseCoopers LLP, which notes a material weakness in internal control over financial reporting related to the classification of futures commission merchant accounts. The filing includes a description of the remediation plan underway to address this material weakness.