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 $12.90B. The average expense ratio is 1.02%. 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 $1.71B in assets. In the last trailing year, the best performing Inverse ETF was the DUST at 47.97%. The most-recent ETF launched in the Inverse space was the MicroSectors FANG+ Index -2x Inverse Leveraged ETN FNGZ in 08/01/18.

TOP ETF PERFORMERS

JDSTDirexion Daily Junior Gold Miners Index Bear 3X Shares69.59%
DUSTDirexion Daily Gold Miners Index Bear 3x Shares68.83%
SZODB Crude Oil Short ETN43.06%
GDXSProshares Ultrashort Gold Miners42.61%
RUSSDirexion Daily Russia Bear 3x Shares33.45%

BOTTOM ETF PERFORMERS

DGAZVelocityShares 3X Inverse Natural Gas ETN-18.34%
EXIVVelocityShares 1X Daily Inverse VSTOXX Futures ETN-13.47%
KOLDProShares UltraShort Bloomberg Natural Gas-12.63%
ADZCFDB Agriculture Short ETN-12.16%
WDRWDirexion Daily Regional Banks Bear 3X Shares-10.07%

top creations

SQQQProShares UltraPro Short QQQ96.32
SPXUProShares UltraPro Short S&P50063.08
SDSProShares UltraShort S&P50062.20
SDOWProShares UltraPro Short Dow3041.90
SPXSDirexion Daily S&P 500 Bear 3X Shares35.17

top redemptions

DGAZVelocityShares 3X Inverse Natural Gas ETN-153.63
SVXYProShares Short VIX Short-Term Futures ETF-98.55
TBTProShares UltraShort 20+ Year Treasury-71.78
DWTVelocityShares 3x Inverse Crude Oil ETN-65.51
TBFProShares Short 20+ Year Treasury-44.35

AUM WINNERS

MIDZDirexion Daily Mid Cap Bear 3X Shares73.51%
GASXDirexion Daily Natural Gas Related Bear 3x Shares66.19%
DGAZVelocityShares 3X Inverse Natural Gas ETN40.21%
GDXSProshares Ultrashort Gold Miners36.05%
DSLVVelocityShares 3X Inverse Silver ETN28.76%

AUM LOSERS

VESHVirtus Enhanced Short U.S. Equity ETF-50.74%
EXIVVelocityShares 1X Daily Inverse VSTOXX Futures ETN-39.91%
SBBProShares Short SmallCap600-39.67%
DRIPDirexion Daily S&P Oil & Gas Exp. & Prod. Bear 3X Shares-32.38%
DWTVelocityShares 3x Inverse Crude Oil ETN-29.86%

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