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Bear Bet: An ETF That Loves Down Markets

Zoe Van Schyndel, CFA
March 23, 2007

The UltraShort QQQ (AMEX: QID  ) , from ProShares is different from most ETFs. This fund has the objective of achieving returns twice the opposite of the daily performance of the Nasdaq 100. If the Cubes, Nasdaq 100 Trust Shares (Nasdaq: QQQQ  ) , lose 10 points, QID seeks to gain twice that or 20 points. It's easy to see that QID could be very useful in a bear or declining market. Investors have flocked to this fund like a bear to a honey pot, putting more than $1.5 billion into the fund since its launch in mid-2006. Of course, there are many negatives to this fund, such as high expenses and taxable gains, so QID is not for everyone.

Bear market honey
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