ProShares Short S&P500

SH provides inverse exposure to a market cap-weighted index of 500 large- and mid-cap US firms selected by the S&P Index Committee.

ProShares Short S&P 500 can be used as a hedge against market downturns, working exceptionally well with high interest income on cash holdings boosting its performance. In the face of a strong market uptrend, SH's -21% total return since September 2023 outperformed expectations, highlighting its effectiveness as a hedging tool. Owning SH in limited quantities reduces net stock market exposure, while offering some protection against a possible 2025 bear market or crash on Wall Street.

SH: Best Direct Hedge Idea Against S&P 500 Bear Market In 2025?

The ProShares Short S&P500 ETF offers a relatively high income hedge against a decline in the S&P500. The SH ETF has historically tracked the inverse of the S&P500 effectively, minus the 0.88% expense fee, and has seen renewed inflows recently. The SH ETF is aimed at benefitting from short-term declines in the S&P500 but has performed well historically over extended periods following high-yield spreads between cash and stocks.

SH: An Effective Market Hedge With Hidden Income

SH is a simple way to short the S&P 500, consistently outperforming its intended -1x target and offering an impressive 6.11% TTM dividend. It outperforms when the VIX is low and the S&P 500 makes large daily swings. This was evident on Wednesday when the S&P 500 closed +0.85% higher, while SH closed only -0.77% lower. The cumulative effect of this can be very beneficial.

SH: Arguably The Best Way To Short The S&P 500

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As investors search for safe havens in volatile markets, bear market funds are gaining popularity as a diversified asset class designed to withstand exceptionally volatile markets. While bear market funds can be appealing during periods of economic downturn due to their potential to produce returns against market movements, these funds can also be exceptionally volatile and risky.

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ProShares Short S&P500 ETF is an unleveraged and easy way to short the S&P 500. SH does not always achieve its intended -1x daily performance of the S&P 500, but this tends to work in its favor while volatility is low. SH pays a quarterly dividend from its holdings in T-Bills.

SH: A Simple, Effective Bet Against The S&P 500

The S&P 500 is expected to consolidate at 4,800 before breaking out and making new highs. Buying activity in SH is still too high and suggests caution on shorting the S&P 500 at current levels. Assets under management in SH are contracting but are still high enough to suggest the stock market has higher to go.

SH: Don't Short The S&P 500, At Least Not Yet

Shorting and inverse trading does not work well in the long run, despite disagreement among investors. ProShares Short S&P500 ETF offers inverse exposure to the daily performance of the S&P 500. SH achieves its net short position through swap contracts and is subject to risks associated with derivatives.

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From glancing at the headlines, the concept of acquiring inverse ETFs – that is, exchange-traded funds that rise in value as their underlying securities, assets or sectors fall – doesn't seem very relevant. After all, the September jobs report came in hotter than expected.

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ProShares Short S&P500 is currently paying a higher cash yield than owning stocks long through a regular index fund. The trust is yielding around 3.5% annualized on a forward basis, with excess cash income beyond its management fee paid to holders. This setup is encouraging risk takers to go short stocks instead of long, a major change of tune for investors.

SH: Mr. Market Is Paying More To Be Short S&P 500, Than Long

Interest in SH has been declining, with the number of shares outstanding dropping from 250,000,000 last October to 117,256,000. This is a positive signal for a higher stock market. There has never been a bear market, or major market decline, to start until buying in SH first dropped to just 5% of assets. It's currently at 17% of assets. SH should be avoided at this time. We expect the start of another bear market, and a possible investment in SH, later this year.

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Matthew Tuttle is currently not holding any positions overnight due to the uncertain market environment. Rob Isbitts highlights the importance of paying attention to market history and the potential for a market downturn.

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During unprecedented times in financial markets, the term "bear market" can strike fear into even the most seasoned investor's heart. As economic tides come and go, the need for strategic planning becomes paramount, and that's where bear market ETFs come into play.

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In 2023, despite expectations of a market collapse, equities rallied as short positions were covered and long put positions closed. Hedging strategies, such as selling equities or using inverse ETFs like ProShares Short S&P500 ETF, can help reduce risk for retail investors. A risk-off event is expected in the second half of the year, and investors should consider hedging strategies to protect their portfolios.

SH: Time To Start Hedging

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While the S&P500 is heading toward a bull market, following a 19.7% rally from the October 2022 lows, traders have raised their bearish bets on the index.

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The ProShares Short S&P500 ETF is an inverse fund that allows investors to short the market without using a margin; however, the current bull market may not be the best time to invest in it. Despite negative headlines and market volatility, the S&P 500 is up 20% from its low in Q4 2022, and retail outflows have been steady, suggesting a contrarian approach to investing. SH is a simple and cost-effective way for retail investors to bet against stocks, with an expense ratio under 1% and minimal concentration risk in its swap positions.

SH: I'd Avoid Shorting The S&P 500 For Now

The latest FX & Rates Survey from Bank of America reveals that bond investors are hunting for long-dated Treasuries, put options on the stock market, and long positions in the Japanese Yen (JPY) versus high-beta currencies to shield themselves from the dangers connected with the U.S. debt limit crisis.

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We recommend investors stay out of SH because of the high levels of bearish sentiment shown by our Master Sentiment Indicator, as well as bearish activity in SH itself. Buying levels in SH are still historically high, marking continued levels of unacceptable bearish sentiment.

ProShares Short S&P 500 ETF: Investor Sentiment Still Negative

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Expert recommendations for choosing among the myriad of Vanguard ETFs may prove to be a valuable resource to investors, even if not all of them will prove right. I present such recommendations made by highly knowledgeable sources, along with my own recommendations and the reasons for them.

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Buying levels in SH (the inverse S&P500 ETF) have remained high since this bear market began. This is not usually a good sign for the market. But the market has been grinding lower and this fund is up 17.4%.

News for ProShares Short S&P500 ETF (SH)