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41 Best Inverse ETFs (Short ETFs / Bear ETFs)

Blain Reinkensmeyer

Aug 02, 2021

When you invest in the stock market, you can bet on both sides of the market using an online broker account. Inverse ETFs (exchange traded funds) are an easy way to place bearish bets without physically shorting shares of stock.

Bottom line, the following ETFs go up in value as the underlying benchmark index they track goes down. See also: List of Long ETFs (Bullish ETFs).

Inverse / Short S&P 500 ETFs (1x, 2x, 3x)

Short S&P 500 SH 1x S&P 500
Short Mid Cap 400 MYY 1x S&P Mid Cap 400
Short Small Cap 600 SBB 1x S&P Small Cap 600
UltraShort S&P 500 SDS 2x S&P 500
UltraShort Mid Cap 400 MZZ 2x S&P Mid Cap 400
UltraShort Small Cap 600 SDD 2x S&P Small Cap 600
UltraPro Short S&P 500 SPXU 3x S&P 500
Direxion S&P 500 Bear 3x SPXS 3x S&P 500 Index
Direxion Mid Cap Bear 3x MIDZ 3x S&P Mid Cap 400 Index
UltraPro Short Mid Cap 400 SMDD 3x S&P Mid Cap 400

Inverse / Short NASDAQ ETFs (1x, 2x, 3x)

Short QQQ PSQ 1x Nasdaq 100
UltraShort QQQ QID 2x Nasdaq 100
UltraPro Short QQQ SQQQ 3x Nasdaq 100

Inverse / Short Russell 2000 ETFs (1x, 2x, 3x)

Short Russell 2000 RWM 1x Russell 2000
UltraShort Russell 2000 TWM 2x Russell 2000
UltraPro Short Russell 2000 SRTY 3x Russell 2000
Direxion Small Cap Bear 3x TZA 3x Russell 2000
UltraShort Russell 1000 Value SJF 2x Russell 1000 Value
Direxion Financial Bear 3x FAZ 3x Russell 1000 Financial Services
UltraShort Russell 1000 Growth SFK 2x Russell 1000 Growth
UltraShort Russell Mid Cap Value SJL 2x Russell Mid Cap Value
UltraShort Russell Mid Cap Growth SDK 2x Russell Mid Cap Growth
UltraShort Russell 2000 Value SJH 2x Russell 2000 Value
UltraShort Russell 2000 Growth SKK 2x Russell 2000 Growth

Inverse / Short Dow Jones ETFs (1x, 2x, 3x)

Short Dow 30 DOG 1x Dow Jones Industrial Average
UltraShort Dow 30 DXD 2x Dow Jones Industrial Average
UltraPro Short Dow 30 SDOW 3x Dow Jones Industrial Average
UltraShort Basic Materials SMN 2x Dow Jones U.S. Basic Materials
UltraShort Consumer Goods SZK 2x Dow Jones U.S. Consumer Goods
UltraShort Consumer Services SCC 2x Dow Jones U.S. Consumer Services
UltraShort Financials SKF 2x Dow Jones U.S. Financials
UltraShort Health Care RXD 2x Dow Jones U.S. Health Care
UltraShort Industrials SIJ 2x Dow Jones U.S. Industrials
UltraShort Real Estate SRS 2x Dow Jones U.S. Real Estate
UltraShort Semiconductors SSG 2x Dow Jones U.S. Semiconductors
UltraShort Oil & Gas DUG 2x Dow Jones U.S. Oil & Gas
UltraShort Technology REW 2x Dow Jones U.S. Technology
UltraShort Utilities SDP 2x Dow Jones U.S. Utilities

Inverse / Short Emerging Markets ETFs (1x, 2x, 3x)

Short MSCI Emerging Markets EUM 1x MSCI Emerging Markets Index
UltraShort MSCI Emerging Markets EEV 2x MSCI Emerging Markets Index
Direxion Emerging Markets Bear 3x EDZ 3x MSCI Emerging Markets Index

Trading and researching ETFs

To compare online brokers for trading ETFs, read our online broker guide and use the comparison tool. I recommend Fidelity which has the best ETF research tools (ETF screeners, charting, third-party reports, etc) and overall experience for ETFs.

Know what's in your ETF and how the ETF is calculated

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on a recent show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas IndexSM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).
A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than or less than what you'd expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies."

Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Or more broadly, how do ETFs compare against the underlying over longer periods of time?

Below I've plotted oil ($WTIC) vs. the ETF tracking oil (USO) over the last 10 years.

Chart of Oil ($WTIC) vs. the ETF Tracking Oil (USO) from 2008 - 2018

This shows that the price of oil has seriously outperformed the ETF, USO. Bottom line, be careful with which ETFs you are holding long. For more on this topic, ETFDB has a good post, 7 Risks of Trading Leveraged ETFs and How to Avoid Them.

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About the Author

Blain Reinkensmeyer

As Head of Research, Blain Reinkensmeyer has 18 years of trading experience with over 1,000 trades placed during that time. Referenced as a leading expert on the US online brokerage industry, Blain has been quoted in The New York Times, Forbes, and the Chicago Tribune, among others.

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