Betashares BEAR ETF (ASX:BEAR)
The BetaShares BEAR Fund is designed to provide inverse or opposite exposure to the largest Australian shares, based on market capitalisation. When the S&P/ASX 200 Accumulation Index falls, BEAR aims to generate positive returns for investors.
What does the BEAR invest in?
The BetaShares BEAR Fund invests in equity index futures contracts to generate magnified returns that are negatively correlated to the S&P/ASX 200 Accumulation Index. In other words, when the ASX 200 rises, BEAR should fall. When the ASX 200 falls, BEAR should rise. We believe BEAR 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 BEAR for?
The BetaShares BEAR Fund could be used by experienced investors to hedge their portfolio against market declines, effectively betting against the Australian stock market. This is a high risk strategy as gains and losses are magnified, compared to a simple ETF tracking the ASX 200 Index. BEAR 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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