05/11/2021
Inverse ETFs can be used to open speculative positions in markets, sectors or industries - or they can be used within the context of an investment portfolio. They are ideal for strategies designed to enhance the performance of a strategically allocated portfolio that is typically designed to achieve a specific goal (accumulation for retirement, charitable giving, etc.) rather than outperforming the market. Used with long-oriented strategies found in conventional ETFs and mutual funds, inverse ETFs can enhance returns by lowering the overall portfolio's correlation to the traditional capital markets. This approach actually reduces the overall risk of the portfolio and delivers higher risk-adjusted returns.