Investors who want to capitalize on a continued fall in the broader commodities market can take a look at the ProShares UltraShort Bloomberg Commodity (NYSEArca: CMD), which takes the daily -2x or -200% performance of the Bloomberg Commodity Index. CMD includes a hefty tilt toward energy, with 8.3% natural gas, 8.1% Brent oil, 7.9% crude oil futures and 4.9% unleaded gas RBOB futures. However, potential traders should use limit orders to better control trades as the ETF shows relatively low activity. [Commodities ETFs Pullback on Strong USD, Overseas Weakness]
Additionally, the investment bank downgraded its outlook on corporate debt to “neutral” for the three months ahead, anticipating that the spread between government bond yields and corporate debt could narrow or yields to increase. For the year, the bank also remains bearish with an underweight outlook on credit.
Fixed-income investors can also hedge their corporate debt exposure with inverse high-yield and investment-grade corporate debt ETFs. For example, the ProShares Short High Yield ETF (NYSEArca: SJB) takes the inverse -1x or -100% daily performance of the Markit iBoxx $ Liquid High Yield Index, and the ProShares Short Investment Grade Corporate ETF (NYSEArca: IGS) tracks the -1x or -100% daily performance of the Markit iBoxx $ Liquid Investment Grade Index.
For more information on the markets, visit our current affairs category.
Max Chen contributed to this article.