February 06, 2008 at 1:00 am by Tom Lydon
Long-short exchange traded funds (ETFs) have outperformed any other fund analyzed by Morningstar so far this year.
Long-short funds combine traditional long or bullish bets with short or bearish ones that allow fund managers to profit even when the market falls, says Ian Salisbury for The Wall Street Journal.
The funds have delivered, as far as their promised performance amid all of the market turmoil. Nonetheless take these gains with a grain of salt. Known drawbacks to these types are short track records and mediocre returns when the market is doing fine, as it was in 2005-2006.
Bear market ETFs make up 20 of the top 25 spots on Morningstar’s list, and the top performing ETF year-to-date is ProShares UltraShort Semiconductor (SSG). It’s up 37.5%.
Tags: Long-Short ETFs
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