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Why Long-Short ETFs are Beating the Market

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Stocks continue to struggle as inflation reached a new four-decade high in June, raising expectations that the Federal Reserve will hike rates aggressively and could send the economy into a recession.

In a long-short investment strategy, the fund goes long stocks that are expected to outperform the market, while taking short positions in stocks that are likely to underperform.

These strategies have the potential to outperform in both rising and falling markets. They also add diversification benefits to a portfolio and lower volatility due to low correlations with broader indexes.

The AGFiQ U.S. Market Neutral Anti-Beta Fund (BTAL - Free Report) takes long positions in low beta stocks like Automatic Data Processing (ADP - Free Report) , and short positions in high beta stocks like DocuSign (DOCU - Free Report) .

The Leatherback Long/Short Alternative Yield ETF (LBAY - Free Report) invests in securities like Exxon Mobil (XOM - Free Report) that it believes will provide sustainable shareholder yield and takes short positions in stocks it believes will decline in price. Tesla (TSLA - Free Report) is one of the short holdings.

The First Trust Long/Short Equity ETF (FTLS - Free Report) has 80% to 100% long positions in stocks like Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) , offset by 0% to 50% short positions in other stocks.

To learn more, please watch the short video above.

 

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