The stock market appears likely to continue its precipitous declines, and the trend may continue well into next year. With that in mind, shorting-selling, or betting against, the market has emerged as a winning strategy.
Not surprisingly, the top exchange-traded fund performers for the third quarter were inverse, or short, funds. These inverse funds gained every time the market declined -- especially in the areas of commodities and energy.
The way things are going right now, there's little to suggest there won't be more downside in these sectors and others as the world slowly but surely slips into what appears to be a severe recession.
Below are the top-performing short ETFs in the third quarter, which includes funds in the technology and utilities sectors as well. The second table provides a more complete list of inverse funds that investors may also want to look at when placing their bets going forward.
Best-Performing Short ETFs in the Third Quarter
Ticker
Name
3-Month Return (%)
Objective
1-Month Return (%)
SMN
UltraShort Basic Materials P
85.28
Sector Fund-Undefined Equity
51.99
DTO
PowerShares DB OIL 2X Short
76.5
Commodity
24.15
DEE
PWR DB Commodity Double Short
70.42
Commodity
21.69
AGA
PowerShares DB AGR Double Short ETN
67.93
Commodity
29.1
REC
RYDEX INV 2X SP ENERGY
64.07
Sector Fund-Energy
28.17
DUG
UltraShort Oil & Gas ProShares
53.61
Sector Fund-Energy
18.55
BOM
PowerShares DB MTLS 2X Short
51.55
Commodity
22.55
PTD
E-TRACS UBS Short PLAT ETN
48.24
Commodity
16.5
SDP
UltraShort Utilities ProShares
44.81
Sector Fund-Utility
24.55
SSG
UltraShort Semiconductors PR
40.6
Sector Fund-Technology
40.56
More Short Funds
Ticker
Name
3-Month Return (%)
Objective
1-Month Return (%)
SDK US
UltraShort Russell MidCap GR
37.98
Contrarian
31.9
SZO US
PowerShares DB Crude Short
34.9
Commodity
13.53
EEV US
UltraShort MSCI Emerging Market
33.19
Emerging Market-Equity
8.21
DDP US
PowerShares DB Commodity Short
32.83
Commodity
13.14
EWV US
UltraShort MSCI JAPAN ProShares
28.94
Contrarian
11.13
ADZ US
PowerShares DB Agriculture Short
27.94
Commodity
13.72
DDG US
Short Oil & Gas ProShares
27.82
Sector Fund-Energy
11.08
RTW US
Rydex Inverse 2X Technology
27.51
Sector Fund-Technology
31.88
TLL US
UltraShort Telecom ProShares
26.43
Contrarian
26.84
SFK US
UltraShort Russell 1000 Growth
25.59
Contrarian
23.51
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Sam Patel, CFA, is the manager of mutual fund research for the TheStreet.com Ratings.
In keeping with TSC's Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.
While Patel cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.
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