The Direxion Daily S&P 500 High Beta Bear 3X Shares (NYSEARCA: HIBS) provides 3x daily inverse exposure to a beta-weighted index of the 100 highest-beta stocks in the S&P 500.
HIBS is passively managed to select the top 100 stocks from the S&P 500 Index with the highest sensitivity to market movements (beta) over the past 12 months, while weighting each of them based on its calculated beta. The fund is designed to deliver 3x inverse exposure to those 100 highest-beta stocks, aiming to provide -300% of the index’s return for a one-day period.
To achieve its goal, the fund holds swaps, futures, short positions or other financial instruments that, in combination, produce inverse exposure to the index.
HIBS gets the added exposure by using short-term financial instruments that are high quality. The index is reviewed and rebalanced quarterly. As a levered product, HIBS is not a buy-and-hold exchange-traded fund (ETF). Rather, it should be used as a short-term, tactical position.
Chart courtesy of www.stockcharts.com
Direxion Daily S&P 500 High Beta Bear 3X Shares has $44 million in assets under management with a 0.19% daily spread. Its expense ratio is 1.08%, meaning it is relatively expensive to hold in relation to other exchange-traded funds.
As with any instrument, potential investors should conduct their own due diligence in deciding whether or not this fund fits their own individual investing needs and portfolio 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.