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ProShares UltraPro Dow30 Message Board

  • judge_smailes8 judge_smailes8 Oct 9, 2011 9:16 PM Flag

    UDOW outperforms 3x the DJIA

    I created a spreadsheet to compare a hypothetical index determined based on 3 times the daily closing value $ movements of the Dow Jones Industrial Average. UDOW has surprisingly outperformed this hypothetical index by 14.5% since UDOW was introduced on February 11, 2010.

    Between market close on February 11, 2010 and October 7, 2011, the hypothetical 3x index reset daily rose about 11.238%. UDOW, on the other hand, rose about 27.376% accounting for reinvested distributions. UDOW therefore rose about 14.5% more than the hypothetical 3x index reset daily.

    Does anyone know of the explanation for UDOW's outperformance of 3x the Dow Jones Industrial average? As far as I can tell, the Dow Jones Industrial Average resets its divisor every time a component stock pays a dividend/distribution, so dividend payouts do not appear to explain the outperformance.

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