Are the bears coming out of hibernation?
The S&P 500 suffered its first weekly decline of the year, and a slight one at that. Still, it might be a good time to take a look at ETFs that short the market, and an active fund in particular.
For instance, the AdvisorShares Ranger Equity Bear ETF (NYSEArca: HDGE), which is an actively managed portfolio that tries to achieve capital appreciation through shorting domestic stocks, has gained 4.6% over the past week after experiencing a 11.2% drop over the last three months during the most recent rally. [ETF Chart of the Day: AdvisorShares Ranger Equity Bear]
The fund managers try to identify companies with low earnings quality or aggressive accounting. [Active Bear, Short ETFs Dine on Dow’s 240-Point Slide]
The ETF has 44 component holdings and has a total 93.9% in shorts and a 6.3% position in cash. Top short positions include Goodyear Tire & Rubber Co. (NasdaqGS: GT) -4.2%, Cliffs Natural Resources (NYSE: CLF) -3.7%, Vale SA (NYSE: VALE) -3.6%, Fossil (NasdaqGS: FOSL) -3.6% and Discover Financial (NYSE: DFS) -3.5%.
Sector allocations include information technology 22%, industrials 6%, healthcare 9%, financials 5%, energy 4%, consumer staples 4%, materials 16%, telecom services 4% and consumer discretionary 27%.