What Is an Inverse ETF?
An inverse ETF is an exchange traded fund (ETF) constructed by using various derivatives to profit from a decline in the value of an underlying benchmark. Investing in inverse ETFs is similar to holding various short positions, which involve borrowing securities and selling them with the hope of repurchasing them at a lower price.
An inverse ETF is also known as a "Short ETF" or "Bear ETF."
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Inverse ETFs vs. Short Selling
An advantage of inverse ETFs is that they do not require the investor to hold a margin account as would be the case for investors looking to enter into short positions
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