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Top 3 ETFs That Short the FTSE 100

Lingering uncertainty is weighing on the economy of the U.K. as a Brexit deadline looms. Given the cloudy economic outlook, some investors might be searching for w๊ays to sell sho༒rt British stocks, betting that prices will fall.

Financial Times Stock Exchange 100 Index (FTSE) is the benchmark index for stocks trading on the London Stock Exchange (LSE). Pronounced "Footsie" by traders, the index is a proxy for U.K.'s stock market and is considered a gauge for the health of Great Britain's ec💃onomy. In addition, ups and downs in the FTSE 100 can influence morning sentiment in U.S. markets, as trading on LSE begins six hours before trading on the New York Stock Exꦦchange (NYSE).

Financial Times Stock Exchange 100 Index has experienced periods of increased volatility since the Brexit referendum, during which the U.K. voted to leave the European Union. Some market watchers expect 澳洲幸运5官方开奖结果体彩网:volatility to continue.

Key Takeaways

  • Financial Times Stock Exchange 100 Index tracks the price action of shares traded on the London Stock Exchange.
  • The U.K.'s stock market has experienced periods of volatility due to Brexit.
  • Brexit still has some investors searching for ways to short sell the U.K. stock market.
  • Buying shares of inverse ETFs on the FTSE is a way to make profits if the U.K.'s stock market falters.

Investors looking to short the FTSE 100 may want to buy shares of an inverse 澳洲幸运5官方开奖结果体彩网:exchange-traded fund (ETF), which is a fund that increases in value when the FTSE 100 falls. These inverse ETFs trade on the London Stock Exchange and should 澳洲幸运5官方开奖结果体彩网:outperform if stocks in the U.K. turn south:

  • The Xtrackers FTSE 100 Short Daily Swap UCITS ETF (LON: XUKS)
  • The L&G FTSE 100 Super Short Strategy Daily 2X UCITS ETF (LON: SUK2)
  • The ETFS 3x Daily Short FTSE 100 ETF (LON: 3UKS)

The in💖formati♏on presented here is current as of February 2022.

1. The Xtrackers FTSE 100 Short Daily Swap UC🌸ITS ETF (XUKS)

Launched in June 2008, the Xtrackers FTSE 100 Short Daily Swap UCITS ETF seeks to replicate the performance of the FTSE 100 Short Index, which moves opposite to the FTSE 100 Total Return Declared Dividend Index. The FTSE 100 Total Return Declared Dividend Index, in turn, is the FTSE 100 and also takes into account the ordinary 澳洲幸运5官方开奖结果体彩网:cash dividends made by the 澳洲幸运5官方开奖结果体彩网:constituents of the index.

Shares of the ETF are designed to move higher when the FTSE 100 ☂Total Return Declared Dividend Index moves lower. Not♊e that the ETF tracks the index on a daily basis rather than a continual basis, so it is not ideal for long-term investment. This is true of most inverse ETFs.

The fund has £13.5 million, or roughly $18.3 million, in net assets and a management fee of 0.50%. The fund attempts to achieve its objective by investing in transferable securities and occasionally uses derivative techniques, such as index swap agreements. It invests the net proceeds of its shares in over-the-counter (OTC) swap transactions, exchanging the☂ invested proceeds against the index's performance.

2. T💫he L&G FTSE 100 Super Short Strategy Daily 2X UCITS ETF (SUK2)

The L&G FTSE 100 Super Short Strategy Daily 2X UCITS ETF began trading in June 2009. The fund's objective is to track the FTSE 100 Daily Super Short Strategy Index, which moves inversely, by a factor of two, to the daily exposure of the FTSE 100 Total Return Declared Dividend Index.

For example, if the FTSE 100 Total Return Declared Dividend Index falls 2% in a day, shares of this inverse fund should rise 4%, plus interest earned on proceeds from the sale of the index portfolio. The ETF has net assets of £15 million, or $20.4 million, and carries a 0.60% management fee.

3. The ETFS 3x Daily Short FTSE 100 ETF (3UKS)

Formed in April 2014, the ETFS 3x Daily Short FTSE 100 ETF seeks to track the FTSE 100 Daily Ultra-Short Strategy RT Gross TR Index. The index provides three times the inverse exposure to the FTSE 100 Total Return Index, which is the FTSE 100 and also considers the 澳洲幸运5官方开奖结果体彩网:total return from capital performance an🅺d income from reinvested dividends.

If, for example, the FTSE 100 Total Return Index decreased by 2%, the ETF and its tracked index would increase by 6% before fees and adjustments. The fund has £7.3 million, or $9.9 million, in net assets and is structured as a 澳洲幸运5官方开奖结果体彩网:debt security instead of a security, or share. It can thus be redeemed on demand by authorized participants.

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