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Inverse ETFs: What They Are and How They Work

By Adam Levy – Updated Oct 22, 2024 at 2:16PM

Key Points

  • Inverse ETFs use derivatives to achieve daily returns opposite of their tracked index, suitable for short-term strategies.
  • High expense ratios, like 0.89% for ProShares Short S&P 500 ETF, can significantly erode investment returns.
  • Inverse ETFs are best used as temporary hedges or for bearish market bets, observing strict timing to minimize losses.
Key findings are powered by ChatGPT and based solely off the content from this article. Findings are reviewed by our editorial team. The author and editors take ultimate responsibility for the content.

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