WrapManager's Wealth Management Blog
When life changes, we can help you thoughtfully respond.

Anticipating Inverse ETF Returns: Doug’s Quiz Corner

Posted by Doug Hutchinson | CFA®, Director of Research and Trading

July 18, 2017

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug teaches a lesson on antcipating inverse ETF returns.

Consider this Scenario:

Your friend Gary is feeling bearish on the stock market so he purchased $10,000 of an inverse ETF.  The inverse ETF he purchased aims to return the opposite of the daily return of the S&P 500 (for example, if the S&P 500 goes down 1% on a given day, the inverse ETF should go up 1% on that day).

There are several reasons why an inverse ETF may not be exactly the inverse of the index on a given day (expense ratio of the ETF, tracking error, trading costs, etc.) but for the purposes of this example, assume that Gary’s inverse ETF returns exactly the inverse of the daily returns of the S&P 500.

[+] Read More

Doug's Quiz Corner ETF Strategies and Investing

Newfound Research Wins Award for Best ETF Strategist from ETF.com

May 3, 2017
Congratulations to Newfound Research for winning the 2016 award for Best ETF Strategist with their QuBe portfolios. Editor’s Note: ... [+] Read More