ETF Spotlight: Inverse ETFs

What are inverse ETFs?

• An inverse ETF is an exchange traded fund (ETF) that profits from decline in the value of a benchmark index or the market.
• These ETFs allow investors to hedge their portfolio or profit when the markets are on a down trend.
• They are constructed using various derivatives allowing to profit from a decline in the underlying benchmark.

ProShares Short S&P 500 (SH)

• SH is a short ETF that seeks a return equal to -1x the return of benchmark S&P 500.
• This fund carries an expense ratio of 0.89% with an AUM of $3.31 Billion.

Performance of SH during virus led panic sell-off

ProShares UltraPro Short S&P 500 (SPXU)

• SPXU is a short ETF that seeks a return equal to -3x the return of benchmark S&P 500.
• This fund carries an expense ratio of 0.91% with an AUM of $1.1 Billion.

Performance of SPXU during virus led panic sell-off

Inverse ETFs vs Short selling

• Inverse ETFs allows investors to hedge their portfolios without having to sell anything short
• No margin account required
• Availability of multiple inverse ETFs for many major market indices

How to invest in these ETFs?

• Create your free US Stocks Account
• Transfer funds to your US Stocks Account from your bank
• Buy and Sell right on the IND SuperMoneyApp