Bear Market Equity

Bear market equity funds and ETFs are mutual funds designed to profit... Bear market equity funds and ETFs are mutual funds designed to profit during falling or down market cycles. They can invest in a variety of safe-haven assets, such as gold, cash and Treasuries, or can have a dedicated short bias, meaning they only short stocks. Some bear market funds will do both. These funds tend to be actively managed. Bear market equity funds and ETFs are attractive for investors who either want to hedge their portfolio against stocks falling, or see the value of their portfolio increase by making a bet on a market decline. The upside to these funds is that if an investor buys them at the right time, they’ll maintain or increase the value of their assets, and have more capital to deploy when markets bottom out. However, holding a bear market fund can result in losses if markets unexpectedly move higher. It’s important to note that some of the assets held by a Bear Market fund may not perform as expected. For example, gold may decline alongside stocks, as it did initially in the 2008 financial crisis. Alternatively, it’s possible that U.S. Treasuries decline along with stocks. Another risk is that government authorities ban short-selling of stocks, which may impede the ability of a fund to profit from market declines. Last Updated: 12/20/2024 View more View less

Bear market equity funds and ETFs are mutual funds designed to profit during falling or down market cycles. They can invest in a variety of safe-haven assets, such as gold, cash and Treasuries,... Bear market equity funds and ETFs are mutual funds designed to profit during falling or down market cycles. They can invest in a variety of safe-haven assets, such as gold, cash and Treasuries, or can have a dedicated short bias, meaning they only short stocks. Some bear market funds will do both. These funds tend to be actively managed. Bear market equity funds and ETFs are attractive for investors who either want to hedge their portfolio against stocks falling, or see the value of their portfolio increase by making a bet on a market decline. The upside to these funds is that if an investor buys them at the right time, they’ll maintain or increase the value of their assets, and have more capital to deploy when markets bottom out. However, holding a bear market fund can result in losses if markets unexpectedly move higher. It’s important to note that some of the assets held by a Bear Market fund may not perform as expected. For example, gold may decline alongside stocks, as it did initially in the 2008 financial crisis. Alternatively, it’s possible that U.S. Treasuries decline along with stocks. Another risk is that government authorities ban short-selling of stocks, which may impede the ability of a fund to profit from market declines. Last Updated: 12/20/2024 View more View less