BetaShares BBUS ETF (ASX:BBUS)
The BetaShares BBUS Fund is designed to provide protection from a declining US share market. When the S&P 500 Total Return Index falls, BBUS aims to generate magnified returns for investors.
What does the BBUS invest in?
The BetaShares BBUS Fund uses equity index futures contracts to generate magnified returns that are negatively correlated to the S&P 500 Total Return Index. In other words, when the S&P 500 rises, BBUS should fall. When the S&P 500 falls, BBUS should rise. We believe BBUS is a high-risk ETF to own in a portfolio, and it is expected to perform poorly over long periods of time.
What do investors use BBUS for?
The BetaShares BBUS Fund could be used by experienced investors to hedge their portfolio against market declines, effectively betting against the US stock market. This is a high risk strategy as gains and losses are magnified, compared to a simple ETF tracking the S&P 500 Index. BBUS is a highly volatile Fund, and there is no guarantee the ETF will provide effective or perfect protection in a falling market.
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