cemagraphics/E+ via Getty Images
Five of the world’s most prominent exchange traded funds, which cumulatively manage more than $1T of investor capital and track the major U.S. equity averages, are again falling in Thursday's pre-market trading as Wall Street looks poised for another risk-off session.
While the S&P 500 (SP500), Nasdaq Composite (COMP.IND), and Dow Jones (DJI) all continue their downward trajectory before the opening bell, there are ways investors can profit from the turmoil. Inverse ETFs provide an investment vehicle for investors to bet against the market, securing gains as the major averages fall.
S&P 500: The iShares Core S&P 500 ETF (NYSEARCA:IVV), Vanguard S&P 500 ETF (NYSEARCA:VOO), and SPDR S&P 500 Trust ETF (NYSEARCA:SPY), which track the S&P 500, each has taken a step lower as all three trade lower by 1% in pre-market trading.
While the S&P 500 has tilted to the red, market participants can look towards the -1X, -2X, or -3X inverse funds for an opportunity to stay positive. The ProShares Short S&P500 (SH), UltraShort S&P500 (SDS), and UltraPro Short S&P500 (SPXU) find themselves +1%, +2%, and SPXU +3.1%, respectively on Thursday morning.
Nasdaq: The Invesco QQQ Trust (NASDAQ:QQQ), which tracks the Nasdaq 100 stocks, also traded lower in early premarket action by -1.2%.
Similar to the inverse S&P funds, investors can look towards a -1X, -2X, and -3X leveraged ETFs in order to capitalize off of QQQ and the Nasdaq’s decline. Here are the three funds along with their pre-market performance: Short QQQ (PSQ) +1.2%, UltraShort QQQ (QID) +2.4%, and the UltraPro Short QQQ (SQQQ) +3.6%.
Dow Jones: The Dow Jones-tracking SPDR Dow Jones Industrial Average ETF (DIA) has also dipped lower in pre-market trading, slipping by -1%.
The financial community can capitalize on the fund's drawdown with three -1X, -2X, or -3X inverse Dow ETFs. Early on the Short Dow30 (DOG) is +1%, while the UltraShort Dow30 (DXD) has gained 2.3%, and the UltraPro Short Dow30 (SDOW) has popped 3.2%.
Every bull market since World War II has had at least one correction before becoming a bear market, Leuthold Group notes. However, this time would be different, see the chart that shows the unique bull market collapse.