Short ETFs are exchange-traded funds (ETFs) that are set up to move in the opposite direction of particular stock indexes. For example, a short ETF is designed to rise in value as the underlying market index falls: if the index falls by 1%, the shares of the ETF should rise by 1% and vice versa. Known as “short ETFs” or “bear market ETFs” they aim to appeal to some investors during volatile markets.
As a general rule, we advise against short selling as much as we advise against options trading, leverage, currency speculation and bond trading. In all of these activities, it’s a rare investor who makes enough profit to compensate for the risk involved. Our view is that if you like the outlook for a market index, you should invest in stocks that will profit from a rise in that index—and at the same time, if you think an index will fall, stay out of stocks.
Institutional investors, particularly hedge funds, carry out around 60% of all trading in leveraged and inverse-leveraged investments. They generally use them as part of a complicated multi-investment trading strategy. They also trade frequently, and in large quantities. This reduces the percentage costs of this kind of trading. However, the trading costs still tend to eat into their invested capital.
One added concern is counterparty risk. That’s the chance the other party in a contract to repurchase securities will default on their obligations. Counterparty risk increases during times of extreme market volatility.
Control your stock market risk by steering clear of short exchange traded funds and following TSI Network and using our three-part Successful Investor strategy:
Get the complete guide to Investing in Canadian ETFs—learn how to get the maximum returns from your ETF investments. Download Best Canadian ETFs, Canadian ETFs vs Mutual Funds, Canadian Index Funds and More: The Rewards and Risks of Canadian ETFs for FREE.
Building the best ETF portfolio for retirement may differ in the details for individual investors, but the basic principles apply for all investors
We still feel that investors will profit the most with a well-balanced portfolio of high-quality individual stocks, but ETFs can also play a.. Read More
Discover the best ways you can add ETFs to your portfolio
ETFs are one of the most popular and most benign investing innovations of our time—and the best ETF investments can be great low-fee ways to hold shares in multiple companies with a single investment… Read More
Our key ETF definitions will help you better understand ETF investing
The simplicity of investing in ETFs holds a lot of appeal for many investors. We’ve compiled a list of ETF definitions so you can determine if ETFs are right for your portfolio.
What does ETF mean?
ETF… Read More
Direct investment in private equity, hedge funds and so on was once just for institutional and high-net-worth individuals. However, alternative assets are now also available through a limited number of ETFs. While they focus on high-risk investments, many aim to use strategies to cut some… Read More
To create a balanced ETF portfolio, focus on funds that hold the kind of stocks we recommend
The best exchange-traded funds offer well-diversified, tax-efficient portfolios with exceptionally low management fees.
ETFs, with their relatively low management fees (MERs), have in large part eclipsed interest in mutual funds… Read More
The best ETF selection strategies will focus on well-diversified funds holding top-quality stocks
In general, we like ETFs better than mutual funds. Their MERs (Management Expense Ratios) are typically much lower than those of mutual funds. That’s because most ETFs take a simpler approach to investing… Read More
A: U.S.-based ProShares offers a range of exchange traded funds for U.S. stock indexes. Of these ETFs, the company offers three types:
1) ProShares Short ETFs are designed to move in the opposite direction of the underlying index. For example, ProShares Short S&P500, $32.90, symbol SH… Read More
Recently a member of Pat McKeough’s Inner Circle asked about exchange-traded funds (ETFs) that are “set up to move in the opposite direction of particular stock indexes”. These are ETFs that are designed to rise in value as the underlying market index falls:… Read More
Q: Pat: Can you suggest some U.S. ETFs that are set up to move in the opposite direction of particular stock indexes, rather than in the same direction? Regards.
A: U.S.-based ProShares offers a range of exchange traded funds for U.S. stock indexes. The company offers… Read More
Investors can use special ETFs called bear funds to hedge their positions in a market downturn.
A bear fund is a type of ETF that is designed to rise in market downturns. A bear market is a situation where stock market averages trend downward… Read More
Learn everything you need to know in 'The ETF Investor's Handbook' FREE Special Report from The Successful Investor.
ETFs Guide for Canadian Investors: Find the best way to invest in ETFs with low fees, low risk & high satisfaction.
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What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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Does TSI Network Use the Information It Receives?
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Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
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