SH (ProShares Short S&P 500, Expense Ratio 0.90%) notably has reeled in more than $300 million in recent sessions, tacking onto its asset base of now north of $2 billion.
The fund is rather popular, for it trades more than 4.8 million shares on an average daily basis but perhaps overshadowed in terms of familiarity by the more frequently traded SDS (ProShares
UltraShort S&P 500, Expense Ratio 0.90%).
SH is the largest “Inverse” equity fund in the U.S. listed landscape, excluding leveraged ones, significantly larger than the number two ranked fund here in terms of AUM (RWM (ProShares Short Russell 2000, Expense Ratio 0.95%) which has about $627 million in AUM). Interestingly, RWM has taken a big hit in recent days in terms of outflows, with nearly $300 million pouring out, so perhaps a directional trader is speculating on continued short term bounce strength here in Small Cap stocks but perhaps a pullback in the bounce in Large Caps, and thus the long position in SH.
We find that portfolio managers are increasingly using funds such as these, that are inversely correlated to a an equity benchmark index without employing leverage, as shorter to medium term hedges in portfolios, especially in times when volatility has been high in the short term (like the past two weeks globally).
Assets are not huge in this segment, but are visible and growing. Also, to put things in perspective, SH debuted in 2006, and we see seventeen funds categorized in the “Inverse Equity” space, most from known “inverse” sponsors like ProShares and Direxion.