Investment Knowledge from stockbrokers.com
What is an inverse ETF? An inverse ETF is sometimes also called a “Bear ETF” or a “Short ETF,” because they are built to help you profit when a certain benchmark loses value. Investing in an inverse ETF is similar to holding multiple short positions, but it comes with less complications.
stockbrokers.com Explains Inverse ETFs:
The inverse ETF first made its debut in 2006, and it has become quite popular in the last few years. The ability to “bet against” the market without having a margin account is a big positive for this type of ETF. As is the case with other ETFs, an inverse ETF is often extremely cost-efficient as well. An inverse ETF is frequently used to hedge a portfolio and provide some support in case of a large market selloff. There are inverse ETF’s available for many different indices, as well as many different sectors of the market. The inverse ETF is an innovative way to hedge a portfolio and provide a greater level of diversification.