While the Dow Jones industrial average and other major indexes sank in trading today, exchange traded funds (ETFs) that short the markets reaped the rewards.
The strongest 20 ETFs in trading today were all funds that short the market. Sitting near the top were:
- ProShares UltraShort FTSE/Xinhua China 25 (FXP), down 12.4% year-to-date
- ProShares UltraShort Basic Materials (SMN), down 28.2% year-to-date
- ProShares UltraShort Oil & Gas (DUG), down 24.4% year-to-date
- Rydex Inverse 2x Russell 2000 (RRZ), u 3.7% year-to-date
- Rydex Inverse 2x S&P 500 (RSW), up 6.5% year-to-date
- ProShares UltraShort Semiconductors (SSG), up 0.6% year-to-date
- ProShares UltraShort MSCI Emerging Markets (EEV), down 13.2% year-to-date
Leveraged and short ETFs are among the fastest-growing segments of the ETF industry. They were first introduced in June 2006, but by the end of January of this year, there were 60 such funds on the market.
If you decide these funds are right for you, just know the risks and have your exit strategy in place.
Read the disclosure, as Tom Lydon is a board member of Rydex Funds.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.