Image Source: AnandKz/Pixabay

Inverse funds are instruments that use various derivatives to benefit from the decline in the value of the underlying security. These funds could be of many types, such as those investing in debt, equity, and more. In this article, we will be talking about Inverse Equity funds. These funds aim to generate returns that match an inverse fixed multiple of short-term returns of an equity index. Let’s take a look at the 10 best-performing Inverse Equity funds.

Ten Best-Performing Inverse Equity Funds

We have referred to the past one year return data (from money.usnews.com) of the inverse equity funds, to rank the 10 best-performing Inverse Equity funds.

10. ProFunds Short Small-Cap ProFund (SHPIX, 11%)

The ProFunds Short Small-Cap Fund offers daily returns that correspond to the inverse of the Russell 2000 Index’s daily return. It has given a return of over 17% in the last six months and almost -16% in the last three years. SHPIX has more than $15 million in net assets. The top two holdings of the fund are: HSBC Bank Canada and Sociedad Hipotecaria Federal SNC IBD.

9. Rydex Inverse Russell 2000® Strategy Fd (RYAFX, 13%)

The Rydex Inverse Russell 2000® Strategy Fund aims to provide investment results that equal the inverse of the Russell 2000 Index on a daily basis. It has given a return of over 17% in the last six months and almost -15% in the last three years.

RYAFX has more than $10 million in net assets. The top three holdings of the fund are: Guggenheim Strategy II, Guggenheim Ultra Short Duration Instl, and Federal Farm Credit Banks.

8. Grizzly Short Fund (GRZZX, 13%)

The Grizzly Short Fund aims for capital appreciation, and it sells stocks and exchange traded funds. It has given a return of almost 21% in the last six months and almost -20% in the last three years. GRZZX has more than $100 million in net assets. The top three holdings of the fund are: Fidelity Inv MM Fds Government I, Industrial Select Sector SPDR ETF, and Consumer Discret Sel Sect SPDR ETF.

7. ProFunds UltraShort Small-Cap Fund (UCPIX, 22%)

The ProFunds UltraShort Small-Cap Fund aims to provide daily investment results that correspond to two times the inverse of the Russell 2000 Index’s daily performance. It has given a return of almost 35% in the last six months and almost -34% in the last three years.

UCPIX has more than $4 million in net assets. The top three holdings of the fund are: HSBC Bank Canada, Sociedad Hipotecaria Federal SNC IBD, and Future on Russell 2000 Index Mar22.

6. Rydex Inverse Russell 2000 2x Strat Fd (RYIUX, 22%)

The Rydex Inverse Russell 2000 2x Strategy Fund aims to provide a return that equals 200% of the inverse of the Russell 2000 Index. It has given a return of over 35% in the last six months and over -33% in the last three years. RYIUX has more than $8 million in net assets. The top three holdings of the fund are: Federal Farm Credit Banks (0.32%), Federal Farm Credit Banks (0.69%), and the Russell 2000 Index.

5. Gotham Short Strategies Fund (GSSFX, 28%)

The Gotham Short Strategies Fund aims to offer long-term capital appreciation, as well as positive returns when the markets are down. For this, the fund invests in long and short positions of equity and equity-related securities.

It has given a return of over 37% in the last six months and over -3% in the last three years. GSSFX has more than $5.50 million in net assets. The top three holdings of the fund are: Occidental Petroleum, Etsy, and FedEx.

4. Direxion Mthly Small Cap Bear 2X Fund (DXRSX, 32%)

The Direxion Monthly Small Cap Bear 2X Fund aims to offer a monthly return that equals 200% of the inverse monthly performance of the Russell 2000 Index. It has given a return of over 40% in the last six months and over -26% in the last three years. DXRSX has more than $4.50 million in net assets, and it mainly invests in swap agreements, futures contracts, short positions, or other financial instruments.

3. ProFunds UltraShort China (UHPIX, 43%)

The ProFunds UltraShort China Fund aims to match the daily return that is two times the inverse of the S&P/BNY Mellon China Select ADRSM Index. It has given a return of almost -8% in the last six months and over -23% in the last three years. UHPIX has more than $3.50 million in net assets. The top three holdings of this fund are: HSBC Bank Canada, Sociedad Hipotecaria Federal SNC IBD, and Profunds Swap Security Ub.

2. ProFunds Ultra Short Emg Mkt Fund (UVPIX, 45%)

The ProFunds UltraShort Emerging Market Fund aims to earn a return that is two times the inverse of the daily return of the S&P/BNY Mellon Emerging Markets 50 ADRSM Index. It has given a return of almost 23% in the last six months and almost -24% in the last three years. UVPIX has more than $1.30 million in net assets.

1. Rydex Inverse Emerging Mkts 2x Strat Fd (RYWWX, 46%)

The Rydex Inverse Emerging Markets 2x Strategy Fund aims to offer a return that correlates to 200% of the inverse of the performance of the BNY Mellon Emerging Markets 50 ADR Index. It has given a return of almost 24% in the last six months and over -23% in the last three years. RYWWX has more than $0.50 million in net assets, and its investment strategy involves the use of short sales of securities.