Filed pursuant to Rule 424(b)(3)
Registration No. 333-236926
IMPORTANT NOTICE
ProShares Ultra Bloomberg Crude Oil (UCO)
ProShares UltraShort Bloomberg Crude Oil (SCO)
(each, an Oil Fund, and together, the Oil Funds)
Supplement dated July 30, 2020
to each Oil Funds Prospectus and Disclosure Document
Dated March 30, 2020, each as supplemented
The Prospectus and Disclosure Document for each Oil Fund are hereby revised to reflect that:
Current Portfolio and Benchmark Exposure. Currently, each Oil Fund has approximately 1/3 of its portfolio exposed to the October 2020 WTI crude oil
futures contract, approximately 1/3 of its portfolio exposed to the November 2020 WTI crude oil futures contract, and approximately 1/3 of its portfolio exposed to the December 2020 WTI crude oil futures contract. The Funds benchmark currently
is exposed to September 2020 WTI crude oil futures contracts, and will begin to roll to November 2020 WTI crude oil futures contracts on August 7, 2020.
Change to Investment Strategies. Each Oil Fund, in anticipation of the benchmarks upcoming roll, and in order to help manage the impact of recent
extraordinary conditions and volatility in the markets for crude oil and related Financial Instruments, intends to adjust its portfolio exposure as described below.
|
|
|
By the close of business on Wednesday, August 5, 2020, each Oil Fund intends to transition its exposure to
the October 2020 WTI crude oil futures contract into exposure to the December 2020 WTI crude oil futures contract. As a result of this transition, each Fund expects to have approximately 1/3 of its portfolio exposed to the November 2020 WTI crude
oil futures contract and approximately 2/3 of its portfolio exposed to the December 2020 WTI crude oil futures contract by the close of business on Wednesday, August 5, 2020.
|
|
|
|
In addition, by the close of business on Thursday, August 6, 2020, each Oil Fund intends to transition its
exposure to the November 2020 WTI crude oil futures contract into exposure to the June 2021 WTI crude oil futures contract. As a result of this transition, each Fund expects to have approximately 2/3 of its portfolio exposed to the December 2020 WTI
crude oil futures contract and approximately 1/3 of its portfolio exposed to the June 2021 WTI crude oil futures contract by the close of business on Thursday, August 6, 2020.
|
Following this portfolio transition each Oil Fund will have exposure to WTI crude oil futures contracts that are not included in the current benchmark. As a
result, the performance of each Fund should not be expected to correspond to two times (2x), or two times the inverse (-2x), as applicable, of the daily performance of its current benchmark. Each Funds
performance could differ significantly from its stated investment objective.
In addition, to the extent an Oil Fund has exposure to a longer-dated WTI
crude oil futures contract (e.g., December 2020 and June 2021 instead of September 2020), the performance of the Fund may be expected to deviate to a greater extent from the spot price of WTI crude oil (which the Fund does not seek to
track) than if the Fund had exposure to a shorter-dated futures contract. WTI crude oil futures contracts (and thus each Fund) typically perform very differently from the spot price of WTI crude oil. The performance of each Fund
therefore will very likely differ in amount, and possibly even direction, from the performance of the spot price of WTI crude oil.
There can
be no guarantee that each Oil Fund will be able to implement the strategies described above or in its Prospectus, continue to use such strategies, or that such strategies will be beneficial. Recent global developments affecting crude oil markets and
the markets for crude oil futures contracts have dramatically increased volatility and increased the likelihood of investors suffering significant or total loss from crude oil-related investments, including an
investment in a Fund.
Change to new Benchmark Index. Each Oil Fund intends to change its benchmark from the Bloomberg WTI Crude Oil SubindexSM to the Bloomberg Commodity Balanced WTI Crude Oil IndexSM (New Benchmark). In order for the Funds to implement this change, the U.S.
Securities and Exchange Commission (the SEC) must approve changes to the exchange listing rules applicable to the Funds. If the SEC approves the listing rule changes, the Funds will update their Prospectus and Disclosure Document and
file with the SEC a Current Report on Form 8-K describing the New Benchmark. Thereafter, each Fund will seek daily investment results, before fees and expenses, that correspond to the New Benchmarks
performance times the stated multiple in the Funds investment objective.