What is an inverse ETF?

An inverse ETF is designed to deliver the opposite of a benchmark's daily performance. For example, if the index falls 1% in a day, a -1x inverse ETF aims to rise about 1% that day.

Like leveraged ETFs, inverse ETFs are typically reset daily, which means longer-term returns can drift from the simple inverse of the index over weeks or months.

They can be useful for short-term hedging or tactical positioning, but they can be risky if held long term. Before using one, make sure you understand the daily objective and how compounding affects outcomes.