In July’s edition of Financial Planning Magazine, Stacey Schultz discusses Short ETFs in “Bad News Benefits.” With recession looming, investors are attempting to benefit from bad news – and they are using ETFs as a low cost way to do so. Many institutions are making money from poorly performing asset classes by offering inverse or short ETFs.
An inverse ETF is an exchange traded fund that uses derivatives for the purpose of profiting from a decline in the value of an index or benchmark.
Short ETFs have seen rapidly increasing trading volumes among professional investors. According to Dan Dolina, director of wealth management at Select Sector SPDRS, they were trading five million shares a day five years ago versus 90 million shares today.
For more information about specific Short ETFs, you can visit ETF MarketPro’s Short ETF Directory.