Deflation and Inverse ETFs

Investors looking for a way to bet on deflation may want to consider inverse ETFs.

Greg Zuckerman writes that, to hedge against deflation, some advisors prefer exchange-traded funds that aim to move in the opposite direction of an index that tends to rise in periods of inflation.

Examples include the DB Base Metals Short ETF (BOS) and Proshares Ultra Short DJ-UBS Crude (SCO).

More aggressive investors may consider directly shorting inflation-linked exchange traded funds including the IndexIQ CPI Inflation Hedged ETF (CPI) or the iShares Barclays TIPS Bond Fund (TIP).

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