A reader has asked: Who are the top2X and 3X short, inverse ETF’s for Spy and QQQ. Thanks, Tom 

Answer: We covered the inverse ETF space in this guide to short and inverse ETFs which I hope you will find useful. As to which are the best-leveraged inverse ETFs on the  S&P 500 and Nasdaq 100 indices we need to think about we define best before we can answer that question perhaps the best metric to use are AUM or Assets Under Management for the ETFs in this space.

Inverse ETFs ranked by size

If we rank the 2 and 3 times levered inverse ETFs by the size of the funds we find two clear winners in the shape of SQQQ and SDS inverse ETFs from the Proshares stable.

SymbolETF NameInverse RatioTotal Assets ($MM)YTD returns
SQQQProShares UltraPro Short QQQ-3x1574.04-79.64%
SDSProShares UltraShort S&P 500-2x1105.78-36.29%
SPXUProShares UltraPro Short S&P 500-3x909.94-57.24%
SPXSDirexion Daily S&P 500 Bear 3X Shares-3x754.8-57.26%
SDOWProShares UltraPro Short Dow30-3x536.19-52.63%
QIDProShares UltraShort QQQ-2x287.85-60.88%

Data from ETDB.com

Inverse ETFs ranked by returns

However, if we look at things from a returns perspective we might take a different view, here are the same names but this time they ranked by 4-week performance instead.

SymbolETF Name4 Week
SPXSDirexion Daily S&P 500 Bear 3X Shares4.43%
SPXUProShares UltraPro Short S&P 5004.14%
SDSProShares UltraShort S&P 5003.48%
SDOWProShares UltraPro Short Dow303.27%
QIDProShares UltraShort QQQ0.88%
SQQQProShares UltraPro Short QQQ0.22%

Data from ETDB.com

What we need to bear in mind here is that leveraged and inverse leveraged ETFs are short term trading instruments with daily resets which are not designed for longer-term strategies.

Inverse ETFs ranked by expense ratios

Finally, we could rank the inverse ETFs in terms of their expense ratios or costs and their respective ratings on these metrics again we get a different pecking order.

SymbolETF NameERExpenses Rating
SDSProShares UltraShort S&P 5000.89%A-
SPXUProShares UltraPro Short S&P 5000.91%A-
SQQQProShares UltraPro Short QQQ0.95%C+
SDOWProShares UltraPro Short Dow300.95%C+
QIDProShares UltraShort QQQ0.95%B-
SPXSDirexion Daily S&P 500 Bear 3X Shares1.08%B+

Data from ETDB.com

Given what we have said about the short-term nature of these products cost may not be your top consideration unless of course, you have a very active trading strategy where you will frequently be opening and closing positions and crossing the spread.

I hope that helps answer your question, Tom, though I suspect that I may have raised a few more.

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