Wall Street ended on a negative note last week and the week before that, strengthening the worth of the adage that September is historically the worst month of the year for stocks. The S&P 500, the Dow Jones and the Nasdaq Composite lost about 0.6%, 0.07% and 0.5%, respectively. The S&P 500 is on its way toward its first monthly decline since January. The Russell 2000 added only 0.42% last week.

This week seems to be no different as of now. The S&P 500 started the week posting its worst daily performance since May 12, per CNBC. Each of the 11 sectors of the benchmark recorded losses. Notably, September has an ill reputation for the stock market. According to moneychimp.com, a consensus carried out from 1950 to 2020 has revealed that September ended up offering positive returns in 32 years and negative returns in 39 years, with an average return of negative 0.62%, which is worse than any other month.

There was a big event last week. President Biden always had plans for tax hikes. In line with that plan, House Democrats drew a host of tax hikes on corporations and wealthy people to finance the costs associated with the social safety net and climate policy that could touch as much as $3.5 trillion (read: Tax Hike in the Cards? ETFs in Focus).

The plan demands top corporate and individual tax rates of 26.5% and 39.6%, respectively, according to a summary released by the tax-writing Ways and Means Committee, as quoted on CNBC. The proposal includes a 3% surcharge on individual income above $5 million and a capital gains tax of 25%.

Investors also fear a contagion from the troubled China property market spreading into the other markets of the world, per the CNBC article. Notably, Chinese developer Evergrande Group is on the brink of default. Plus, Fed taper talks are rife and Covid cases are rising.

However, last week was not extremely downbeat on every ground as the oil sector surged and retail sales bounced back. Still, the S&P 500 may end September on a rocky note. Thus, to bypass the equity market weakness, investors may rev up their exposure to long/short ETFs.

Below we highlight a few of these that outperformed the S&P 500 past month (down 0.20%).

ETFs in Focus

ProShares Long Online/Short Stores ETF (CLIX Quick QuoteCLIX - Free Report) – Up 6.55%

The underlying ProShares Long Online/Short Stores Index consists of long positions in the online retailers included on the ProShares Online Retail Index and short positions in the bricks and mortar retailers included in the Solactive-ProShares Bricks and Mortar Retail Store Index. The fund charges 65 bps in fees.

Changebridge Capital Long/Short Equity ETF (CBLS Quick QuoteCBLS - Free Report) – Up 4.25%

This ETF is active and does not track a benchmark. The Changebridge Capital Long/Short Equity ETF seeks long-term capital appreciation while minimizing volatility. The expense ratio of the fund is 1.70%

First Trust Hedged BuyWrite Income ETF – Up 2.62%

The First Trust Hedged BuyWrite Income ETF seeks to provide current income by investing in equity securities listed on U.S. exchanges of all market capitalizations and by utilizing an option strategy consisting of buying U.S. exchange-traded put options on the S&P Index and writing U.S. exchange-traded covered call options on the S&P Index. The expense ratio of the fund is 0.85%.

KFA Mount Lucas Index Strategy ETF (KMLM Quick QuoteKMLM - Free Report) – Up 2.52%

This ETF is active and does not track a benchmark. The KFA Mount Lucas Index Strategy ETF seeks to provide a total return that, before fees and expenses, exceeds that of the KFA MLM Index over a complete market cycle. The expense ratio of the fund is 0.90%.

iM DBi Hedge Strategy ETF – Up 1.39%

The iM DBi Hedge Strategy ETF seeks long-term capital appreciation. The fund is active and does not track any benchmark. It charges 85 bps in fees.