There are many great inverse bond ETF options for your portfolio. Inverse bond ETFs are comprised of several bond types with various maturity dates, qualities, locations, and companies. In fact, many investors use inverse bond ETFs to hedge against market downturns and losses. Of course, as an investor, you should evaluate the performance history, asset management, dividends, holdings, and expense ratios of inverse ETFs to determine the best for your specific portfolio. In this post, we’ll discuss a few of the best inverse bond ETF options for your portfolio.
Short High Yield Options
Short high yield ETFs are great options for your portfolio. These options follow inverse price performances of corresponding high yield indexes. Recently, several high yield indexes have seen strong bull runs. Many experts foresee a coming drop in these rising price trends. When these prices drop, short high yield ETfs significantly increase in value. Surely, capitalize on market trends and predictions with short high yield option ETFs.
Leveraged Inverse Options
Leveraged inverse options are also great bond ETFs for your portfolio. These options typically provide more gains than equally-performing ETFs targeting opposing price movements. An ETF’s status as leveraged inverse is often denoted by the word “ultra” in its name. Additionally, these options come in different correlation levels: -1x.-2x, and -3x. For example, a -2 leveraged inverse bond ETF expects a 2% gain when its tracked index declines 1% in value. Of course, the inverse is also true. If an index gains value, these ETFs lose value. Absolutely, harness and predict index movement trends with leveraged inverse options.
Shorting ETF Options
Third, shorting ETF options are more inverse bond selections that diversify your portfolio. In fact, these options are often the easiest, most efficient ways for individual investors to short bonds. Various shorting inverse bond ETFs gain capital when their underlying assets lose capital. Individual investors remove margin and short selling restrictions by owning short ETFs. With their ownership, the investor longs underlying shares in exchange for short exposure to bond markets. Certainly, devise several simple, efficient shorting strategies with various shorting inverse bond ETF options.
Hedging ETF Options
Next, many investors or prime brokers hedge their investments with inverse bond ETF options. By design, hedging ETF options move opposite their indexes. Therefore, most inverse bond ETFs act as if their durations are negative. This way, adding inverse ETFs to a bond portfolio lowers its overall duration and rate-sensitivity. Therefore, should bond prices decrease, the presence of hedging inverse ETF options offsets some of the complete portfolio’s losses. Definitely, leverage the hedging power of inverse bond options to reduce losses.
Large Asset Options
Lastly, inverse bond ETF options with large underlying asset values are the final options for improving your portfolio. There are several inverse ETF options with underlying assets valued from millions to billions. In fact, well-performing ETF options in this category have seen returns up to 80%. Additionally, there are many inverse bonds trading on short-term FAANG stock movements. Short-term trading of these various industry titans often provides significant returns due to their value. Of course, maximize potential returns by with large asset inverse bond options.
There is a myriad of great inverse bond ETF options for your portfolio. For example, short high yield options capitalize on market trends, leaderships, and predictions. Second, harness and predict index movement trends with leveraged inverse options. Third, various shorting inverse bond ETF options devise several simple, efficient shorting strategies. Next, leverage the hedging power of inverse bond options to reduce losses. Finally, large asset inverse bond options maximize potential returns. When searching for the best inverse bond ETF options for your portfolio, consider the options described above.