Whether they believe we’re in a new bull market or that we’re in a temporary upswing in a long bear market, traders are using ETFs to play the current rally.
According to the WSJ article Bears are Wary as Bull Returns, reporter E.S. Browning writes that money managers feel obliged to participate in the rally to try to provide some return for clients.
Browning cites the use of ETFs by the CEO of Waddell & Reed Financial as a way to get some short term pop for the firm’s flagship fund while other portfolio managers have been hampered in their ability to jump in and out of the market.
The firm plans to shift to bearish ETF bets once the rally loses steam.