Gain Inverse Exposure to the S&P 500 with This ETF

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

The ProShares UltraPro Short S&P500 (SPXU) seeks daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the S&P 500. 

SPXU allows investors to bet against the S&P 500, ratcheting up the leverage to provide 3x inverse exposure to the widely followed index. Due to the effects of compounding, the fund is not designed to be held for an extended period of time. These effects may be more pronounced in funds with larger or inverse multiples and in funds with greater volatility.

The fund typically enjoys very strong liquidity, which is paramount for a product of this nature. Investors should monitor their holdings frequently, and consult the prospectus for further details on the calculation of the returns and the risks associated with investing in this product. 

Chart Courtesy of StockCharts.com

The ETF has almost $700 million in assets under management, a 0.05% spread and a 0.91% expense ratio, meaning it is more expensive to hold relative to other exchange-traded funds. It currently trades at just over $28 a share and has a 1.69% yield. Its next distribution date is March 25.

ProShares UltraPro Short S&P500 has an MSCI ESG Fund Rating of A based on a score of 6.58 out of 10. The MSCI ESG Fund Rating measures the resiliency of portfolios to long-term risks and opportunities arising from environmental, social, and governance factors. ESG Fund Ratings range from best (AAA) to worst (CCC).

To sum up, SPXU provides (-3x) exposure to a market-cap weighted index of 500 of the largest and most liquid U.S. companies. However, I urge interested investors to, as with any investment, conduct their own due diligence in deciding whether this fund is right for their individual portfolio needs and goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Exclusive  9 Best Dividend Stocks to Buy Now

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE


img
previous article

What’s the best way to handle a crazy seesaw stock market that makes you feel seasick? While it’s tempting to recommend a mix of Dramamine and Johnnie Walker Blue, both of those are only temporary palliatives. The better strategy is to do what Sir Winston Churchill advised, and that is to keep calm and carry on. Of course, that’s easier said than done, especially if you’ve been walking this market high wire without

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE