Profit From Fear With These Short ETFs

These inverse ETFs benefitted in the third quarter from their short bets.
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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.

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potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.

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