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 121 ETFs traded in the U.S. markets, Inverse ETFs gather total assets under management of $13.63B. 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 $1.67B in assets. In the last trailing year, the best performing Inverse ETF was the BOM at 48.80%. 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

SVXY ProShares Short VIX Short-Term Futures ETF 261.91%
BOM DB Base Metals Double Short ETN 61.01%
TZA Direxion Daily Small Cap Bear 3x Shares 35.04%
LABD Direxion Daily S&P Biotech Bear 3X Shares 35.03%
WDRW Direxion Daily Regional Banks Bear 3X Shares 34.87%

BOTTOM ETF PERFORMERS

BZQ ProShares UltraShort MSCI Brazil Capped -37.40%
DGAZ VelocityShares 3X Inverse Natural Gas ETN -34.01%
BOS DB Base Metals Short ETN -31.34%
DUST Direxion Daily Gold Miners Index Bear 3x Shares -25.93%
KOLD ProShares UltraShort Bloomberg Natural Gas -24.27%

TOP CREATIONS

DGAZ VelocityShares 3X Inverse Natural Gas ETN 226.66
DWT VelocityShares 3x Inverse Crude Oil ETN 91.10
QID ProShares UltraShort QQQ 41.47
YANG Direxion Daily FTSE China Bear 3X Shares 15.36
ERY Direxion Daily Energy Bear 3X Shares 14.29

TOP REDEMPTIONS

TBT ProShares UltraShort 20+ Year Treasury -126.44
SVXY ProShares Short VIX Short-Term Futures ETF -60.29
SDS ProShares UltraShort S&P500 -46.49
TBF ProShares Short 20+ Year Treasury -45.22
TZA Direxion Daily Small Cap Bear 3x Shares -32.64

AUM WINNERS

DWSH AdvisorShares Dorsey Wright Short ETF 223.15%
SPDN Direxion Daily S&P 500 Bear 1X Shares 137.21%
DGAZ VelocityShares 3X Inverse Natural Gas ETN 96.27%
GASX Direxion Daily Natural Gas Related Bear 3x Shares 66.19%
ERY Direxion Daily Energy Bear 3X Shares 63.43%

AUM LOSERS

DPK Direxion Daily MSCI Developed Markets Bear 3x Shares -54.05%
FINZ ProShares UltraPro Short Financial Select Sector -42.14%
TBX ProShares Short 7-10 Year Treasury -37.01%
GDXS Proshares Ultrashort Gold Miners -23.57%
VMIN REX VolMAXX Short VIX Futures Strategy ETF -18.44%

Features and News

Worst Performing ETFs Of The Year

Losses for the worst performers ranged from 22% to more than 90%.

Index Investor Corner

Best Performing ETFs Can Bite You

The best-performing ETFs can offer plenty of risk.

ETF.com Live Chat!

Live Chat: Why Do ETFs & ETNs Close?

Dave Nadig answers readers' ETF questions in real time. Here's the transcript.

Features and News

Bitcoin ETFs Not Quite Dead Yet

After rejecting nine bitcoin ETF filings this week, the SEC said it would review that decision.

Daily ETF Watch

ETF Week: Closures Abound; 2 Funds Launch

There were several launches and closures this week.

Daily ETF Watch

5 More ETFs To Close

Offerings from United States Commodity Funds and Hartford will shut down in September.

Features and News

Most Shorted ETFs

Traders are betting these ETFs will fall.

Daily ETF Watch

Credit Suisse ‘Accelerating’ ETNs

Five ETNs will cease trading next month.

Daily ETF Watch

Lower-Cost Online Retail ETF Debuts

ProShares launches its third fund that bets on the decline of brick-and-mortar retail in favor of online sales.