The ProShares Short S&P500 ETF (SH) seeks daily investment results that are the inverse of the daily performance of the S&P 500 stock index. This means that when the S&P goes down for the day, SH goes up, and vice versa. 

The S&P 500 Index holds large cap U.S. companies across all 11 GICS sectors, although SH is not designed to mirror that weighting but rather effectively offset the performance of the broad U.S. stock market. In order to achieve its goals, SH invests in a range of derivatives, swap agreements and futures contracts, with additional holdings in U.S. Treasury Bills and select Repurchase Agreements.

SH’s expense ratio is 0.89% and the fund has about $1.9 billion in assets under management.

Rationale 

Naturally, the most direct way to gain exposure to the SH approach to the market is to buy its listed shares. But there are a number of good reasons for investors to reconsider that approach. After all, shorting the S&P500 on a daily basis is a technique that investors can use directly themselves, potentially adapting more quickly to changing market conditions than SH’s broad-based portfolio approach. Rather than buying SH shares themselves, investors interested in gaining inverse exposure to the broad S&P 500 Index might consider buying funds that provide similar exposure. After all, the return drivers that will benefit SPY might also benefit other funds that are more diversified.

Investing in SH 

A search on Magnifi suggests that investors can gain access to the inverse of the S&P 500 via a number of different funds and other ETFs, including those shown below. 

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