I would like to take some hands-off, leveraged short positions of the global market, or portions thereof.

There a many leveraged short ETFs. On looking at them, unsurprisingly the value of them has collapsed over the last ten years.

Here is a 10Y view on one (YANG):

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And a 1Y view:

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In the last year it's fluctuated in price by a factor of about two, due to economic uncertainty.

But given that this is a leveraged short fund that has been loosing money since inception (like almost all short ETFs) has the original capital position been eroded? If there was a market crash how much could you expect these ETFs to increase in value?

Lastly: any other recommendations for hands-off leveraged shorting?

  • 1
    If most leveraged and unleveraged short ETFs have dropped in value over the years, isn't it obvious that AUM has dropped, eg. the original capital position been eroded? Future performance in a market crash? It depends on the size of the move and the nature of the move. Zig zag volatility decreases leveraged performance. Recommendations for hands-off leveraged shorting? On the day that a deep correction or begins, anything will do. Until then, not so much. Commented Feb 4, 2020 at 0:17

1 Answer 1


For instance, one source has the current market capitalization of QID at about $309 million but has the May 2018 market capitalization at about $267 million. The fund declined in price but more investors needing hedges came into the fund.

Well, someone might buy the QQQ and write covered calls on it. Then they might hedge the position with the QID. Or they might buy a single stock with a good dividend and indirectly hedge it with the QID.

The best way to hedge is with a 1x inverse fund because it stays closer to correlation during fluctuations. A powerful way to hedge is with futures using near minimum margin deposits.

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