But that’s not always the case. Every now and again, stocks move lower. There might be a recession, natural disaster, credit crisis, or any number of calamities that impact the market.
Betting on that move lower is a tough way to make money, but it’s certainly not impossible. There are a number of ETFs that can help.The Horizons BetaPro S&P/TSX 60 Bear ETF (TSX:HXD) is a levered inverse ETF that will increase if the underlying index goes down and decrease if the index increases. It’s double leveraged, which means if the TSX 60 falls by 1%, the ETF will increase by 2%.
The ETF is rebalanced daily, making it most suitable for shorter-term trades rather than as a staple in your portfolio.Naturally, this ETF hasn’t done well in the last five years, thanks to relative strength in Canadian stocks. It’s down nearly 19%. In addition, the ETF charges a rather high management fee of 1.15%, but keep in mind it performs a specialized service.
Horizons has other inverse ETFs that offer a leveraged bet against other sectors like gold, oil, natural gas, financials, and global mining stocks.
Another popular Horizon daily bear ETF is the one that bets against the S&P 500. The Horizons BetaPro S&P 500 Bear ETF (TSX:HSD) trades more than 200,000 shares on an average day despite only having a market cap of just over $57 million.