Flows Into Inverse ETFs Show Demand for Coronavirus Hedges

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Flows into ProShares exchange-traded funds this year show investor appetite for investments that benefit from a declining stock market as the coronavirus threatens economic growth and investor confidence. The “What Goes Up” podcast talks with Simeon Hyman, head of investment strategy at ProShares, and Bloomberg’s Rachel Evans about how investors are positioning themselves amid the uncertainty. Some highlights of the conversation are below. 

Hyman on why inverse and leveraged-inverse equity ETFs are seeing some of the heaviest inflows among ProShares offerings this year:

 “The virus is creating volatility, and people always look for hedges in times of volatility. It’s quite well-known that after just about every one of these pandemics, epidemics, viruses, you look six to 12 months out, the market’s up. But in the short run, things can happen.”

In lighter fare, Hyman discusses the strategy behind the ProShares Pet Care ETF:
“It’s conversational alpha. If you’re a financial adviser and you’re talking to your clients, it resonates because their pets are near and dear to their heart and they’re spending so much money on them, it’d be nice for them to make a little money off of the pet-care industry as well.” 

Mentioned in this podcast:
Riskiest ETFs Get Green Light, But Brokers Might Not Touch Them

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