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What Bear Market mutual fund or ETF has performed the best total return from 2/19/20 to present (or approximate)? This would be a fund designed to short the stock market or some equivalent. Please exclude leveraged vehicles or indexes like SH. Any ideas? Thanx.


  • M* Premium Fund Screener:
    (Fund Category = Bear Market)
    and (Distinct Portfolio Only = Yes)
    and (Fund Name not like %ultra%)
    and (Fund Name not like 2X)
    and (Fund Name not like Inv)

    That cuts the fund search down to a handful (5). Few enough to look at one by one.

    Of course there's a more basic question of what "leveraged vehicles" you're expecting to exclude. For example, GRZZX "can invest in securities that may have a leveraging effect (such as derivatives and forward-settling securities) which may increase market exposure, magnify investment risks, and cause losses to be realized more quickly."

    Even if you don't consider that leveraged, what about BEARX? The fact that the top ten holdings amount to -177% of assets (from the M* screener) suggests that a look at the prospectus is in order.

    "Under normal market conditions, the Fund will use leverage in implementing its investment strategies, and the aggregate exposure of the Fund's short positions plus its long positions is expected to exceed the Fund's net asset value." Summary Prospectus.
  • Hey wreck... check out IQDAX. Q infinity find. Has the characteristics of what you are looking for without being a true short fund. Do your homework. Full disclosure I hold six figures + of this fund


    Baseball fan
  • Looks to me 6 figures is needed to get into fund as / yahoo.
  • edited October 2020
    Infinity/IQDAX is not really a bear fund. It has performed well but there is a risk that the managers could be long securities when you want to go short in your portfolio. One of the more interesting bear funds is PSSAX.
  • Hi All, yes, agreed, IQDAX is not really a bear fund but it has been an excellent diversifier in turbulent market conditions.

    I was trying to take into account shipwrecks content and context as I interpreted it as I believe that is what most folks are looking for, a hedge if you will, or as part of the "40" of a 60/40 seeing how interest rates are virtually zero unless you want to buy the debt of folks who likely nada gonna pay you back and you like to wear your hair cuts, how you like 30-40 cents on the dollar mister...

    You really have to know what you are doing to short the market naked. At any time the printing presses can go brrrr and be turned on by Powell...if Biden does win and Pelosi and friends get their way early next year it will be freebies for all (don't misunderstand me, yes from my tone I am very fiscally conservative but do agree, this time we do need to take care of folks during this pandemic, totally get it and agree with it)..if you are short the market you can get whipsawed.

    FWIW, I'd rather hide out in cash, Tbills and IQDAX until we get some more clarity and less political and civil acrimony. I don't really care if I miss the next 10-20% up, just don't want to experience the next 30-40% down...

    Does give me pause to some extent as I've stated before due to the "IQDAX black box" aspect but hey you know what, I think this market is the most advanced ponzi scheme in the history of the markets...a greater fool thing going from my perspective and only for entertainment purposes it might be less risky to park funds there than in the bond or stock markets

    Good Luck and Good Health to all, get out their and vote as you see fit,

  • Most of the Bear funds mirror SH +/- a little either way.
  • Well they should. Maybe you're best off just buying SH.
  • PSSAX has beaten SH by a significant margin. For a while I thought it was just the bond portfolio aspect of it, but I don't think it's just that anymore, maybe something also to do with how they trade futures.
  • LB, OK I will look at it this weekend. thanx.
  • msf
    edited October 2020

    PSSAX has beaten SH by a significant margin. For a while I thought it was just the bond portfolio aspect of it, but I don't think it's just that anymore, maybe something also to do with how they trade futures.

    It might be trading or it might just be the level of equity exposure.

    For simplicity, assume bond returns are fairly stable. They certainly should be relative to equities. This assumption lets us view 100% of the volatility as equity-based. PSSAX is about 8% less volatile than SH. 3/5/10 year standard deviations are 14.93/12.52/11.22 vs 16.35/13.68/12.42. Capture ratios are consistent with this observation.

    Just eyeballing the graphs, it looks like they might be much closer if one adjusted SH's beta (e.g. by multiplying SH's changes by 92% or so) and adding a relatively constant bond performance kicker (say, 1% - 2%).

    Assuming my quick and dirty black box guesstimates are close to the mark, the question then becomes: how/why does PSSAX have less equity exposure than SH?

    I had thought that PSSAX was just like others of its ilk, like DSENX, PSTKX, etc. Those funds target 100% equity exposure via derivatives, and then add bond exposure. For example, the PIMCO prospectus section describing PSTKX reads:
    The Fund typically will seek to gain long exposure to its benchmark index in an amount, under normal circumstances, approximately equal to the Fund’s net assets. However, S&P 500 Index derivatives may be purchased with a fraction of the assets that would be needed to purchase the equity securities directly, so that the remainder of the assets may be invested in Fixed Income instruments.
    Unlike these funds, and unlike SH, PSSAX does not aim for 100% (actually negative 100%) equity exposure. Its prospectus reads:
    While the Fund will, under normal circumstances, invest primarily in Index short positions backed by a portfolio of Fixed Income Instruments, PIMCO may reduce the Fund’s exposure to Index short positions when PIMCO deems it appropriate to do so. Additionally, the Fund may purchase call options on Index futures contracts or on other similar Index derivatives in an effort to limit the total potential decline in the Fund’s net asset value during a market in which prices of securities are rising or expected to rise.
    So, according to the prospectus PIMCO is actively managing the equity side as well as the bond side of the fund. I'm still guessing that this is largely macro market timing and not individual issue selection, but one would need to dig through the (semi)annual statements to verify that.
  • Very happy with IQDAX
  • Have done well this year with CLIX--Long On-Line/Short Store Retail. They use index swaps for the short portion and a combo of long swaps and stocks for the longs. Although much of the shake-out in B & M has already occurred, will hang on to CLIX a bit longer until potential stabilization with a vaccine. More recently opened small positions in DFND and FLYT to test their investment thesis.

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