ProShares on Monday announced a reverse share split for ProShares Ultra VIX Short-Term Futures ETF (NYSEArca: UVXY), which has seen trading volume rise sharply over the past week.
UVXY will reverse split 1-for-6, the ETF manager said. The fund will trade at its post-split price on March 8, according to a press release.
The move will boost the share price, and every six shares held by shareholders will be replaced with one share.
Reverse splits can lessen trading costs for ETF investors because they may help reduce bid-ask spreads, ProShares says.
“For funds with a lower share price, bid-ask spreads represent a higher percentage of the transaction price than for higher-priced funds, which can increase both costs and volatility—even when the spread is higher,” the firm said on its website. “ProShares believes the reverse splits will adjust the share prices to a more cost-effective level for the funds’ shareholders, and therefore it is in our shareholders’ best interest to do so.”