Inverse fund

Inverse exchange-traded fund, short fund, short-selling fund is an index exchange-traded fund which fair price and thus estimated asset value changes in the opposite direction from the value of the index the fund is linked to. Thereby such ETF are managed as a hedging instrument for investors. The inverse dynamics in relation to the benchmark indices is conducted by modeling the index movement and using derivative financial instruments (futures, swaps, etc.), or, much less frequently, bets (shorts, or short positions) on the rise/fall of the index. The measure of excess of the fund's profitability relative to the benchmark index rate of return with the opposite sign is called the fund's leverage (most often, the leverage is two or three).