I’m Keith DeGreen, and this is your Investors Minute.
While most exchange-traded funds rise and fall just as their underlying index does, an inverse ETF will do just the opposite.
For example, while the popular ETF, SPY, corresponds to the performance of the S&P 500 Stock Index, an ETF with the ticker “SH” will do exactly the opposite. SH will rise when the S&P drops, and drop when the S&P rises.
Meanwhile, DIA is an ETF that corresponds to the DOW, but DOG is an ETF that will do exactly the opposite.
There are also inverse bond ETFs. For example, TBF will rise and fall inversely to the value of the 20-year U.S. Treasury Bond Index, but the ETF, TLT, will rise and fall with that index.
The takeaway? Whether leveraged or non-leveraged, corresponding or inverse, ETFs offer a world of opportunities to investors.
FEE-ONLY DeGreen Capital Management. Pioneers in low-cost exchange- traded fund investing. Irvine: 949-333-4550. Scottsdale: 480-609-9900. www.DeGreen.com. Minimum portfolio requirement $1,000,000.
©DeGreen Capital Management LLC. All rights reserved.