Are the bears coming out of hibernation?
The S&P 500 suffered its first weekly decline of the year, and a slight one at that. Still, it might be a good time to take a look at ETFs that short the market, and an active fund in particular.
For instance, the AdvisorShares Ranger Equity Bear ETF (HDGE) , which is an actively managed portfolio that tries to achieve capital appreciation through shorting domestic stocks, has gained 4.6% over the past week after experiencing a 11.2% drop over the last three months during the most recent rally. [ETF Chart of the Day: AdvisorShares Ranger Equity Bear]
The fund managers try to identify companies with low earnings quality or aggressive accounting. [Active Bear, Short ETFs Dine on Dow’s 240-Point Slide]
The ETF has 44 component holdings and has a total 93.9% in shorts and a 6.3% position in cash. Top short positions include Goodyear Tire & Rubber Co. (GT) -4.2%, Cliffs Natural Resources (CLF) -3.7%, Vale SA (VALE) -3.6%, Fossil (FOSL) -3.6% and Discover Financial (DFS) -3.5%.
Sector allocations include information technology 22%, industrials 6%, healthcare 9%, financials 5%, energy 4%, consumer staples 4%, materials 16%, telecom services 4% and consumer discretionary 27%.
One of the portfolio managers/principals, John Del Vecchio, also helped launch the new Forensic Accounting ETF (FLAG) , which tracks S&P 500 stocks weighted by earnings quality. [New ‘Forensic Accounting’ ETF]
AdvisorShares Ranger Equity Bear ETF
For more information on active ETFs, visit our actively managed ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.