SH offers a 1x inverse daily performance of the S&P 500, making it suitable for hedging against short-term market volatility. SH is less prone to value decay than heavily leveraged inverse ETFs, allowing for longer holding periods, but is not ideal for long-term bearish bets. Geopolitical risks and upcoming trade policy deadlines could trigger market volatility, presenting tactical opportunities to use SH.
As economic concerns and trade tensions mount, strategists are lowering their outlooks for the S&P 500. A Q2 rebound is less likely for the index.
President Trump's tariffs unleash a fresh wave of chaos in global markets. Investors should keep an eye on these ETFs.
The S&P 500 has hit a new all-time high thanks to deregulation hopes in the Trump era, a resilient economy, easing inflation and an upbeat start to the earnings season.
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.
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 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.