Short-bias exchange traded funds went from being top performers in July to losing ground in August as markets recovered, even as many indexes fell short of a big rally, CNN reports.
In July, ProShares Ultrashort Russell 2000 Value SJH returned 19.6%percent, ProShares Ultrashort Real Estate SRS gained 19.0 percent and ProShares Ultrashort Financials SKF was up 18.1 percent, making them the top three ETFs, according to Lipper. In August, their fortunes reversed with Ultrashort Russell 2000 Value losing 4.91 percent, Ultrashort Real Estate down 11.25% and Ultrashort Financials off 5.1 percent.
The ETFs use leverage and shorting, based on slices of the Russell indexes, or, in the case of the financials and real estate, the Dow Jones U.S. Financials Index and Dow Jones U.S. Real Estate Index.
The movement from the top of the heap to a loss for the month reflects the volatility in the index components and risks taken when betting the market will go down.