What are some examples of short ETFs and how they can be used to improve returns?

December 5, 2022

Short exchange-traded funds (ETFs) are investment products that allow investors to gain exposure to the inverse or opposite performance of an underlying benchmark or index. These ETFs use various investment strategies and techniques to generate returns that are negatively correlated to the performance of the underlying index, which means that they can potentially provide higher returns in falling markets and lower returns in rising markets.

Short ETFs can be used by investors to improve their returns in a number of ways. For example, they can be used as a hedging tool to protect against losses in a portfolio by offsetting the impact of market downturns. They can also be used as a tactical investment tool to take advantage of short-term market trends or to implement a bearish market view. Additionally, they can be used in combination with other investments to create a more balanced and diversified portfolio.

Some examples of short ETFs include:

ProShares Short S&P 500 ETF (SH)
Direxion Daily S&P 500 Bear 1X ETF (SPDN)
Invesco S&P 500 Equal Weight ETF (RSP)
ProShares UltraShort QQQ ETF (QID)
Direxion Daily Small Cap Bear 3X ETF (TZA)

It is important to note that short ETFs are typically more volatile and risky than traditional long ETFs, and they may not be suitable for all investors. It is always recommended to thoroughly research and carefully consider the risks and potential rewards of any investment before making a decision.

“The grim irony of investing, then, is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for. So if we pay for nothing, we get everything.” – John C. Bogle

sc name=”fma-cta”]

This website is owned and operated by Investor Unity Pty Ltd (ABN: 90 160 624 331). Any advice included in this website or correspondence is general advice only and is based solely on consideration of the investment or trading merits of the financial products alone, without taking into account the investment objectives, financial situation or particular needs (i.e. financial circumstances) of any particular person. In addition to its internal services, Investor Unity is compensated by brokers and other third parties by way of referral/affiliate and/or general partnership arrangements, via its websites and other communications. Investor Unity is genuinely interested in your long-term trading & investment success. We advise you to take all necessary steps to ensure you have a good understanding of the products & services you’re considering investing in – particularly if they involve leverage. While Investor Unity takes every care to ensure that we only deal with the highest quality services, from throughout the industry, past performance is not a guarantee of future performance. Before making an investment or trading decision based on the general advice, the recipient should carefully consider the appropriateness of the advice in light their financial circumstances and should carefully review the PDS of the relevant financial product as provided by your investment broker. Past results are not a guarantee of future performance. Please contact us, to discuss any questions or concerns you may have- we are here to help.