Use ETFs To Protect Yourself From A Pullback

January 18, 2012

While the outlook may be improving in the United States, investors should know that exchange-traded products may be able to help them better weather any pullbacks, according to an article on The Street.

In order to remain protected, investors need to hold assets that move inversely to equities, according to the article. One way to do so is through long-term Treasury ETFs.

The iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) and the Direxion 20+ Year Treasury Bull 3x ETF (NYSEArca: TMF) are mentioned by the article.

The other way to zig while equities zag is to take a long position in instruments related to the CBOE Volatility Index—or VIX—the market’s leading measure of volatility, the report said. Specifically, it cited the iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) or the Velocity Shares Daily 2x VIX Short Term ETN (NYSEArca: TVIX) as two viable VIX-related options.

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