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 120 ETFs traded in the U.S. markets, Inverse ETFs gather total assets under management of $12.92B. 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 Short S&P500 SH with $1.69B in assets. In the last trailing year, the best performing Inverse ETF was the DSLV at 57.76%. 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

DWT VelocityShares 3x Inverse Crude Oil ETN 97.47%
OILD ProShares UltraPro 3x Short Crude Oil ETF 97.29%
USOD United States 3x Short Oil Fund 97.18%
WTID UBS ETRACS - ProShares Daily 3x Inverse Crude ETN 95.57%
SCO ProShares UltraShort Bloomberg Crude Oil 59.79%

BOTTOM ETF PERFORMERS

DGAZ VelocityShares 3X Inverse Natural Gas ETN -80.00%
KOLD ProShares UltraShort Bloomberg Natural Gas -64.12%
YANG Direxion Daily FTSE China Bear 3X Shares -24.15%
SOXS Direxion Daily Semiconductor Bear 3x Shares -23.91%
EDZ Direxion Daily MSCI Emerging Markets Bear 3X Shares -23.34%

TOP CREATIONS

SH ProShares Short S&P500 137.48
DGAZ VelocityShares 3X Inverse Natural Gas ETN 86.07
SVXY ProShares Short VIX Short-Term Futures ETF 34.80
DUST Direxion Daily Gold Miners Index Bear 3x Shares 26.71
BZQ ProShares UltraShort MSCI Brazil Capped 18.77

TOP REDEMPTIONS

TBT ProShares UltraShort 20+ Year Treasury -125.55
TZA Direxion Daily Small Cap Bear 3x Shares -121.33
DWT VelocityShares 3x Inverse Crude Oil ETN -109.62
SPXS Direxion Daily S&P 500 Bear 3X Shares -89.33
DRIP Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3X Shares -60.19

AUM WINNERS

WTID UBS ETRACS - ProShares Daily 3x Inverse Crude ETN 114.92%
USOD United States 3x Short Oil Fund 114.57%
KOLD ProShares UltraShort Bloomberg Natural Gas 98.37%
GASX Direxion Daily Natural Gas Related Bear 3x Shares 66.19%
RXD ProShares UltraShort Health Care 56.27%

AUM LOSERS

ERY Direxion Daily Energy Bear 3X Shares -56.48%
SBM ProShares Short Basic Materials -51.13%
SCC ProShares UltraShort Consumer Services -41.98%
DWSH AdvisorShares Dorsey Wright Short ETF -37.98%
FINZ ProShares UltraPro Short Financial Select Sector -36.86%

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