Inverse ETF Overview

Inverse ETFs are powerful and complex trading instruments. They allow traders to benefit from price declines in major ETFs. For example, if the SPDR S&P 500 fund (SPY) goes down 1% on one day, you should expect that the price of ProShares Short S&P 500 ETF (SH) goes up 1% the same day. Inverse ETFs can use leverage as well to magnify their returns. Thus, these inverse-leveraged ETFs need to be handled with care.

Keep in mind that inverse ETFs deliver the desired returns over prespecified periods only—usually one day. Thus, the stated multiple (e.g., - 2x) of the fund's underlying index only attempts to do so over one-day holding periods. Consequently, inverse ETFs can be inappropriate investment vehicles to hold if you have a significantly longer holding period in mind.

With 124 ETFs traded in the U.S. markets, Inverse ETFs gather total assets under management of $13.30B. The average expense ratio is 1.01%. Inverse ETFs can be found in the following asset classes:

  • Equity
  • Commodities
  • Alternatives
  • Fixed Income
  • Currency

The largest Inverse ETF is the ProShares UltraShort 20+ Year Treasury TBT with $1.84B in assets. In the last trailing year, the best performing Inverse ETF was the DTYS at 47.66%. The most-recent ETF launched in the Inverse space was the BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETN FNGD in 01/22/18.

TOP ETF PERFORMERS

BZQProShares UltraShort MSCI Brazil Capped42.46%
WTIDUBS ETRACS - ProShares Daily 3x Inverse Crude ETN31.34%
OILDProShares UltraPro 3x Short Crude Oil ETF30.86%
USODUnited States 3x Short Oil Fund30.61%
DWTVelocityShares 3x Inverse Crude Oil ETN29.97%

BOTTOM ETF PERFORMERS

ADZDB Agriculture Short ETN-36.74%
FNGDBMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETN-30.23%
DEEDB Commodity Double Short ETN-28.57%
DGAZVelocityShares 3X Inverse Natural Gas ETN-18.08%
SOXSDirexion Daily Semiconductor Bear 3x Shares-15.16%

top creations

SQQQProShares UltraPro Short QQQ162.98
DGAZVelocityShares 3X Inverse Natural Gas ETN145.77
TZADirexion Daily Small Cap Bear 3x Shares59.04
SPXUProShares UltraPro Short S&P50054.13
LABDDirexion Daily S&P Biotech Bear 3X Shares42.04

top redemptions

TBTProShares UltraShort 20+ Year Treasury-49.05
SVXYProShares Short VIX Short-Term Futures ETF-27.61
JDSTDirexion Daily Junior Gold Miners Index Bear 3X Shares-27.02
CHADDirexion Daily CSI 300 China A Share Bear 1X Shares-22.83
DWTVelocityShares 3x Inverse Crude Oil ETN-21.82

AUM WINNERS

DFVSiPath US Treasury 5-Year Bear ETN235.70%
KOLDProShares UltraShort Bloomberg Natural Gas115.21%
TBXProShares Short 7-10 Year Treasury90.87%
USODUnited States 3x Short Oil Fund76.07%
FLATiPath U.S. Treasury Flattener ETN67.44%

AUM LOSERS

JDSTDirexion Daily Junior Gold Miners Index Bear 3X Shares-29.82%
EXIVVelocityShares 1X Daily Inverse VSTOXX Futures ETN-29.05%
FNGDBMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETN-27.75%
DWTVelocityShares 3x Inverse Crude Oil ETN-22.69%
SIJProShares UltraShort Industrials-17.38%

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