|Bid||0.00 x 900|
|Ask||0.00 x 3000|
|Day's Range||28.33 - 28.60|
|52 Week Range||26.99 - 37.22|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||-1.08|
|Expense Ratio (net)||0.95%|
Hawkish Fed outlook and renewed trade tensions shook the market to start August. These inverse ETF areas could be on a tear in the near term.
As the earnings season begins, ETF investors should keep in mind that the upcoming quarterly results may come up short compared to what we have been accustomed to. If the estimate for a decline holds up, it would mark the first time the S&P 500 reported two straight quarters of year-over-year earnings declines in three years.
Discover four viable hedging strategies with index-based ETFs, including the use of inverse and leveraged funds, as well as call writing and buying puts.
Popular technology stocks have recently staged a rebound. But segmented money flows show the rally is suspect. Let’s examine the issue with the help of a chart. Chart Please click here for a chart showing money flows in 11 popular tech stocks.
The decade-old U.S. bull market has been threatened by renewed trade fight lately. Investors could ride out the downbeat sentiments through inverse or leveraged inverse ETFs as these products offer big gains in a short span.
President Trump’s ban on China telecom giant Huawei is hurting technology stocks because Huawei is a big customer of prominent U.S. companies. Last week’s blacklist order said U.S. companies could no longer export technology to Huawei. For astute investors, segmented money flows provide an edge in doing good analysis.
As the market is on its way to witness the worst month since December on renewed trade tensions, shorting the same with ETFs could be a good option.
With the S&P 500 up about 15% year-to-date, it would appear safe to say that the bull market is intact. The other side of that discussion is that stocks plunged in the fourth quarter, basically entering a bear market while reminding investors that equities do not move up in a straight line and carrying some downside protection is necessary.While bull markets do not die of old age, there are signs this bull market is aging -- something many investors have acknowledged for some time. With first-quarter earnings season right around the corner, investors may want to consider how companies report earnings as one sign of an aging bull market."S&P 500 companies reported about $1.37 trillion in adjusted earnings for 2018. They reported $1.17 trillion in GAAP earnings last year as well," reports Barron's. "(GAAP is short for 'generally accepted accounting principles.') In other words, the accountants signed off on $1.2 trillion in earnings. Management told investors they earned $1.37 trillion."InvestorPlace - Stock Market News, Stock Advice & Trading TipsAdding to the case for the best funds for downside protection are numerous factors, including flareups in the U.S./China spat, the fear of the Federal Reserve potentially reversing course and raising interest rates this year and the specter of markets pricing in concerns regarding 2020 presidential candidates. * 7 Marijuana Companies: Which Pot Stocks Should You Buy? For investors looking for downside protection, these are some of the best funds to consider. Best Funds: Cambria Tail Risk ETF (TAIL)Expense Ratio: 0.59% per year, or $59 on a $10,000 investment.The Cambria Tail Risk ETF (CBOE:TAIL) is not just one of the best funds for portfolio protection, it is also one of the best to own when equities swoon. TAIL's fourth-quarter chart proves as much.The actively managed TAIL "offers the potential advantage of buying more puts when volatility is low and fewer puts when volatility is high," according to Cambria. "While a portion of the fund's assets will be invested in the basket of long put option premiums, the majority of fund assets will be invested in intermediate-term U.S. Treasuries. As the fund is designed to be a hedge against market declines and rising volatility, Cambria expects the fund to produce negative returns in the most years with rising markets or declining volatility."In other words, TAIL is one of the best funds when stocks are sinking, but when stocks are rising, TAIL is vulnerable, as highlighted by the fund's year-to-date loss of almost 13%. Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)Source: Shutterstock Expense ratio: 0.3%Low-volatility exchange-traded funds (ETFs) are often viewed as some of the best funds to consider when the market tumbles. The Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA:SPHD) and rival "low vol" funds typically do not capture all of a bull market's upside, but perform less poorly in a bear market.If investors accept and understand that trait, SPHD can be one of the best funds if you're seeking income and downside protection. SPHD, which pays a monthly dividend, has a 12-month distribution rate of 3.9%, about double the dividend yield on the S&P 500. * 7 AI Stocks to Watch with Strong Long-Term Narratives Historically, defensive sectors with high dividend yields trade at premium valuations, but that is not the case with SPHD. The fund devotes over 38% of its combined weight to the defensive real estate and utilities sectors, but more than 76% of its holdings are classified as value stocks. ProShares Short QQQ (PSQ)Expense Ratio: 0.95%As the fourth quarter showed investors, when technology and other growth stocks fall out of favor, markets can rapidly deteriorate. One of the primary benefits of the tech-heavy Nasdaq-100 Index is that it overshoots more traditional broader equity benchmarks on the way up. However, with growth sectors, such as tech, communication services and consumer discretionary, commanding massive percentages of the overall U.S. equity market, declines in those groups usually permeate the entire market.The ProShares Short QQQ (NYSEARCA:PSQ) is ideal for buffering against tech declines. Importantly, PSQ is one of the best funds for traders new to inverse ETFs, because this product is not leveraged. Rather, PSQ is designed to deliver the daily inverse performance of the Nasdaq-100. So if that index falls 1% on a particular day, PSQ should rise 1%.Still, PSQ should be treated as a short-term instrument."Due to the compounding of daily returns, ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period," according to ProShares. AGFiQ US Market Neutral Anti-Beta Fund (BTAL)Expense ratio: 0.76%Like the aforementioned TAIL, the AGFiQ US Market Neutral Anti-Beta Fund (NYSEARCA:BTAL) is one of the best funds when stocks are declining. Buying this fund in advance of those declines can be risky because if stocks continue trending higher, BTAL likely generates negative returns."BTAL's objective is to seek performance results that correspond to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Thematic Market Neutral Anti-Beta Index," according to the fund's issuer. "BTAL strives to achieve this objective, by investing long in U.S. equities that have below average betas and shorting those securities that have above average betas, within sectors." * 10 Dow Jones Stocks Holding the Blue Chip Index Back BTAL is down 5% year-to-date, far better than the 13% loss sported by TAIL. In either case, investors are reminded these are among the best funds to own when equities are faltering. During lengthy moves to the upside, these products will lag. Global X | JPMorgan U.S. Sector Rotator Index ETF (SCTO)Expense Ratio: 0.83%The Global X | JPMorgan U.S. Sector Rotator Index ETF (NYSEARCA:SCTO) is a small, overlooked ETF that employs a momentum-based U.S. sector rotation strategy. Despite its diminutive status, this could be one of the best funds to own when stocks sink because SCTO can move to 100% cash when volatility spikes or stocks decline."SCTO seeks to limit equity volatility to a maximum of 20% by allocating assets to short term treasuries in more unstable markets," according to Global X.This fund may be more appropriate for conservative investors because it does not need markets to fall in order to generate positive returns. That said, SCTO is positioned defensively with over 51% of its combined weight currently allocated to the Consumer Staples Select SPDR (NYSEARCA:XLP) and the SPDR Dow Jones REIT ETF (NYSEARCA:RWR).As of this writing, Todd Shriber owned shares of SPHD. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Internet Stocks to Watch * 7 AI Stocks to Watch with Strong Long-Term Narratives * 10 Dow Jones Stocks Holding the Blue Chip Index Back Compare Brokers The post 5 of the Best Funds for Downside Protection appeared first on InvestorPlace.
As the equity market continues to pullback and more or less erase gains for the year, concerned investors can take on some exposure to bearish or inverse ETFs to hedge against further falls. For example, the ProShares Short S&P500 (SH) takes a simple inverse or -100% daily performance of the S&P 500 index. Alternatively, for the more aggressive trader, leveraged options include the ProShares UltraShort S&P500 ETF (SDS) , which tries to reflect the -2x or -200% daily performance of the S&P 500, the Direxion Daily S&P 500 Bear 3x Shares (SPXS) , which takes the -3x or -300% daily performance of the S&P 500, and ProShares UltraPro Short S&P 500 ETF (SPXU) , which also takes the -300% daily performance of the S&P 500.
Historically, the Dow Jones Industrial Average returned an average 0.6% over October, which has made it the seventh-best month of the year. The S&P 500 typically added 0.9% over October, which is also good enough for seventh place, with the same ratio of positive October months to negative ones as the Dow. Meanwhile, the Nasdaq Composite Index's October was historically the eighth-best month of the year, going back 46 years.
Equity investors who are wary of any further swings can look to alternative ETF strategies to limit the potential risks. According to data from "Stock Trader's Almanac," the month of September has been the worst performing month of the year for the Dow Jones Industrial Average and the S&P 500 since 1950, the worst for the Nasdaq since 1971, and the most difficult for the Russell 1000 and Russell 2000 since 1979, CNBC reports.