By Rebecca Jarvis CNBC Reporter
03 Aug 2007 | 05:09 PM ET
When the market tanks, these ETFs soar.
We’re talking
about ultra-short exchange traded funds. Investors fretting over the
recent stock market selloff may want to take a look at this group of ETFs.
They work like
any other ETF and act as open-ended mutual funds in that they can be traded
at any time. The ultra-short twist is that they double-short whichever index
they are attempting to replicate.
Enviable Returns
In February when
the Dow Industrials Average fell 2.8% — the worst month in nearly two years
— ProShares UltraShort
Dow 30 ETF gained 7.3%.
Now with the
Dow off nearly 6% from its July 19 record high, ultra-short ETFs are returning
a pretty penny.
ProShares UltraShort
Dow 30 ETF is up 12.2%. ProShares
UltraShort QQQ, which double-shorts the NASDAQ, is up
13.7%. And ProShares UltraShort S&P 500 is
up a whopping 16.8%.
Tom Lydon, editor
of ETF Trends, says the time to buy is when an index trades below its 200-day
moving average because it may "trigger
the beginning of a change in trends."
See the full article here:
http://www.cnbc.com/id/20091173/site/14081545
