Bears Increasing with Short ETF Gaining Popularity

If you’re an investor, you’ve been seeing some scary headlines of late:

‘Hindenburg Omen’ looms over Wall Street

Beware: Market valuation looks like 2007 again

Cramer: ‘Giant reset’ looming for markets

Stars aligned for a ‘serious’ US correction

And those are just from this week. Of course, there are bulls who take the other side—see Wharton professor Jeremy Siegel’s assurance from the week before, Keep buying—you ‘can’t lose,’ or Wells Fargo Private Bank CIO John Lynch’s estimation Thursday that S&P could trade at 1,900 ‘relatively easily.’

But if you think the Dow’s 15 percent rise (down from 19 percent a couple weeks ago) this year is simply unsustainable and a pullback is inevitable, or you’re convinced Fed tapering is nigh and is going to send investors into hiding, there are ways for bears to bet on a bust.

One is the short ETF, a.k.a. inverse ETF, and one industry source said there’s been a noticeable uptick in inflows into such instruments in the past few weeks, as more people have raised alarms about the market. Alternative ETF provider ProShares said it has seen net inflows of $3.8 billion into inverse products in 2013, although more than half of that was in the first three months of the year.

CNBC

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