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 117 ETFs traded in the U.S. markets, Inverse ETFs gather total assets under management of $12.05B. The average expense ratio is 1.05%. Inverse ETFs can be found in the following asset classes:

  • Equity
  • Commodities
  • Alternatives
  • Fixed Income

The largest Inverse ETF is the ProShares Short S&P500 SH with $1.93B in assets. In the last trailing year, the best performing Inverse ETF was the DGAZ at 227.30%. The most-recent ETF launched in the Inverse space was the Direxion Daily S&P 500 High Beta Bear 3X Shares HIBS in 11/07/19.

Top ETF Performers

DGAZ VelocityShares 3X Inverse Natural Gas ETN 31.24%
DRIP Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3X Shares 24.37%
KOLD ProShares UltraShort Bloomberg Natural Gas 22.18%
GASX Direxion Daily Natural Gas Related Bear 3X Shares 18.04%
DSLV VelocityShares 3X Inverse Silver ETN 16.36%

Bottom ETF Performers

LABD Direxion Daily S&P Biotech Bear 3X Shares -30.63%
ZBIO ProShares UltraPro Short Nasdaq Biotechnology -23.03%
BIS ProShares UltraShort Nasdaq Biotechnology -15.43%
FNGD MicroSectors FANG+ Index -3X Inverse Leveraged ETN -13.07%
FNGZ MicroSectors FANG+ Index -2x Inverse Leveraged ETN -8.73%

Top Creations

DWT VelocityShares 3x Inverse Crude Oil ETN 137.44
SDS ProShares UltraShort S&P500 122.42
SQQQ ProShares UltraPro Short QQQ 99.70
SPXS Direxion Daily S&P 500 Bear 3X Shares 82.33
LABD Direxion Daily S&P Biotech Bear 3X Shares 78.92

Top Redemptions

DUST Direxion Daily Gold Miners Index Bear 3x Shares -67.69
SVXY ProShares Short VIX Short-Term Futures ETF -50.87
PSQ ProShares Short QQQ -49.54
HDGE AdvisorShares Ranger Equity Bear ETF -31.50
RWM ProShares Short Russell2000 -30.77

AUM Winners

KOLD ProShares UltraShort Bloomberg Natural Gas 187.94%
OILD ProShares UltraPro 3x Short Crude Oil ETF 123.89%
LABD Direxion Daily S&P Biotech Bear 3X Shares 96.92%
MIDZ Direxion Daily Mid Cap Bear 3X Shares 71.82%
DWSH AdvisorShares Dorsey Wright Short ETF 53.49%

AUM Losers

GASX Direxion Daily Natural Gas Related Bear 3X Shares -37.80%
SIJ ProShares UltraShort Industrials -32.29%
EFZ ProShares Short MSCI EAFE -31.90%
ZBIO ProShares UltraPro Short Nasdaq Biotechnology -28.26%
HDGE AdvisorShares Ranger Equity Bear ETF -25.89%

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