The International Monetary Fund (IMF) recently downgraded its 2017 forecast for Canada. The IMF cited the slowing growth in China, falling oil prices and a rising U.S. dollar as the reasons for the downgrade.
The sharp drop in oil prices has hurt the energy sector, which in turn has hurt the Canadian economy. Given that the outlook for the energy sector and oil prices remains bearish, the Canadian economy is likely to continue to face challenges going forward.
However, the bearish outlook also presents an opportunity. Investors can capitalize on this opportunity by taking a look at two ETFs; Horizon’s BetaPro S&P/TSX Capped Energy Bear Plus (ETF) (TSX: HED) and Horizon’s BetaPro NYMEX Crude Oil Bear Plus (ETF) (TSX: HOD).
HED seeks daily investment results that correspond to two times (200%) the inverse of the daily performance of the S&P/TSX Capped Energy Index. HOD seeks daily investment results that corresponds to two times (200%) the inverse of the daily performance of the NYMEX light sweet crude oil futures contract for the next delivery month.
Over the last one year, both ETFs have outperformed the S&P/TSX, with HOD registering gains of more than 68%.
