Best Inverse ETFs of 2025 | 41 Top Short & Bear Market ETFs

Written by Blain Reinkensmeyer
Edited by Jeff Anberg
Fact-checked by Steven Hatzakis

April 08, 2025

Inverse ETFs — also known as short ETFs or bear ETFs — allow traders to profit when the market declines. These funds deliver the opposite return of their benchmark index, and some use leverage (1x, 2x, or 3x) to amplify those returns. Whether you're hedging a portfolio or betting on a downturn, inverse ETFs offer a convenient way to express a bearish view without directly shorting stocks. Below, I’ve broken down the best inverse ETFs across the S&P 500, Nasdaq, Dow Jones, and emerging markets.

On the flip side, if you're looking to capitalize on a rising market, check out our updated list of the best long ETFs — also called bullish ETFs — which are designed to deliver gains when the market climbs. Whether you're bullish or bearish, using ETFs strategically can help fine-tune your market exposure.

Best Inverse ETFs by Index

Inverse / Short Dow Jones ETFs (1x, 2x, 3x)

ETF NAME	TICKER	LEVERAGE	BENCHMARK INDEX
Short Dow 30	DOG	1x	Dow Jones Industrial Average
UltraShort Dow 30	DXD	2x	Dow Jones Industrial Average
UltraPro Short Dow 30	SDOW	3x	Dow Jones Industrial Average
UltraShort Basic Materials	SMN	2x	Dow Jones U.S. Basic Materials
UltraShort Consumer Goods	SZK	2x	Dow Jones U.S. Consumer Goods
UltraShort Consumer Services	SCC	2x	Dow Jones U.S. Consumer Services
UltraShort Financials	SKF	2x	Dow Jones U.S. Financials
UltraShort Health Care	RXD	2x	Dow Jones U.S. Health Care
UltraShort Industrials	SIJ	2x	Dow Jones U.S. Industrials
UltraShort Real Estate	SRS	2x	Dow Jones U.S. Real Estate
UltraShort Semiconductors	SSG	2x	Dow Jones U.S. Semiconductors
UltraShort Oil & Gas	DUG	2x	Dow Jones U.S. Oil & Gas
UltraShort Technology	REW	2x	Dow Jones U.S. Technology
UltraShort Utilities	SDP	2x	Dow Jones U.S. Utilities

Inverse / Short S&P 500 ETFs (1x, 2x, 3x)

ETF NAME	TICKER	LEVERAGE	BENCHMARK INDEX
Short S&P 500	SH	1x	S&P 500
Short Mid Cap 400	MYY	1x	S&P Mid Cap 400
Short Small Cap 600	SBB	1x	S&P Small Cap 600
UltraShort S&P 500	SDS	2x	S&P 500
UltraShort Mid Cap 400	MZZ	2x	S&P Mid Cap 400
UltraShort Small Cap 600	SDD	2x	S&P Small Cap 600
UltraPro Short S&P 500	SPXU	3x	S&P 500
Direxion S&P 500 Bear 3x	SPXS	3x	S&P 500 Index
Direxion Mid Cap Bear 3x	MIDZ	3x	S&P Mid Cap 400 Index
UltraPro Short Mid Cap 400	SMDD	3x	S&P Mid Cap 400

Inverse / Short NASDAQ ETFs (1x, 2x, 3x)

ETF NAME	TICKER	LEVERAGE	BENCHMARK INDEX
Short QQQ	PSQ	1x	Nasdaq 100
UltraShort QQQ	QID	2x	Nasdaq 100
UltraPro Short QQQ	SQQQ	3x	Nasdaq 100

Inverse / Short Russell 2000 ETFs (1x, 2x, 3x)

ETF NAME	TICKER	LEVERAGE	BENCHMARK INDEX
Short Russell 2000	RWM	1x	Russell 2000
UltraShort Russell 2000	TWM	2x	Russell 2000
UltraPro Short Russell 2000	SRTY	3x	Russell 2000
Direxion Small Cap Bear 3x	TZA	3x	Russell 2000
UltraShort Russell 1000 Value	SJF	2x	Russell 1000 Value
Direxion Financial Bear 3x	FAZ	3x	Russell 1000 Financial Services
UltraShort Russell 1000 Growth	SFK	2x	Russell 1000 Growth
UltraShort Russell Mid Cap Value	SJL	2x	Russell Mid Cap Value
UltraShort Russell Mid Cap Growth	SDK	2x	Russell Mid Cap Growth
UltraShort Russell 2000 Value	SJH	2x	Russell 2000 Value
UltraShort Russell 2000 Growth	SKK	2x	Russell 2000 Growth

Inverse / Short Emerging Markets ETFs (1x, 2x, 3x)

ETF NAME	TICKER	LEVERAGE	BENCHMARK INDEX
Short MSCI Emerging Markets	EUM	1x	MSCI Emerging Markets Index
UltraShort MSCI Emerging Markets	EEV	2x	MSCI Emerging Markets Index
Direxion Emerging Markets Bear 3x	EDZ	3x	MSCI Emerging Markets Index

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Trading and researching ETFs

Trading inverse ETFs requires more than just picking a fund with “short” or “ultra” in the name. Before placing a trade, it’s critical to understand how these ETFs work, what they track, and how long you intend to hold them. In my experience, inverse ETFs are most effective when used as short-term tactical tools, not buy-and-hold investments.

When comparing brokers, look for platforms that offer powerful ETF screeners, third-party analyst research, and in-depth charting tools. Personally, I recommend Fidelity for ETF trading. It offers outstanding research capabilities, comprehensive screener filters, and no commissions on ETF trades. You can compare brokers side-by-side using our comparison tool, which helps you match platform features to your strategy.

» Want to know more? Read our quick takes on ETFs and mutual funds.

Know what's in your ETF and how the ETF is calculated

Inverse ETFs aren’t always as simple as they look. A trader on CNBC’s Fast Money once questioned how the UltraShort Oil & Gas ProShares ETF (DUG), which is the double inverse of oil & gas, could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article "Understanding ProShares' Long-Term Performance" on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than or less than what you'd expect over longer periods.

The article goes on to explain how and why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG — the Dow Jones U.S. Oil & Gas Index. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies."

Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Or more broadly, how do ETFs compare against the underlying over longer periods of time?

The difference a day makes: SQQQ vs. QQQ (1-Year vs. 1-Day Performance)

Leveraged inverse ETFs like SQQQ are designed to provide the opposite of the daily return of their underlying index, in this case the Nasdaq-100, tracked by QQQ. But over longer periods, those daily resets can lead to surprising results.

Let’s look at two snapshots: one over a full year, and one over a single trading day.

A chart comparing the 1-year performance of QQQ vs SQQQ, from Yahoo Finance.

At first glance, you might expect SQQQ, a fund designed to deliver the inverse of 3x the daily return of QQQ, to be up significantly. After all, if QQQ is down nearly 6%, shouldn't SQQQ be up 18%?

Not exactly. Over a year, compounding, volatility decay, and daily rebalancing effects start to distort that relationship. Because the fund resets every day, the long-term math breaks down especially during periods of volatility, where daily swings offset one another and erode gains over time.

A chart comparing the daily performance of QQQ vs SQQQ, from Yahoo Finance.

Here’s where SQQQ does exactly what it’s designed to do. A single-day drop of 2.2% in QQQ translates to a +6.7% move in SQQQ, a nearly perfect execution of its –3x daily objective.

Leveraged inverse ETFs only track their index accurately on a daily basis. Over time, market volatility compounds in ways that can make performance diverge dramatically from what you might “expect” by simple multiplication.

As someone who’s watched traders misunderstand this for years, I always emphasize: these are short-term tools. They’re best used for intraday or multi-day trades, not as long-term hedges or directional bets. If you’re holding for weeks or months, rethink the strategy. The numbers won’t add up.

If you're going to trade these products, use them as short-term tactical tools and keep a close eye on the underlying index methodology and fund structure. They’re not “set it and forget it” vehicles. Bottom line, be careful with which ETFs you are holding long. For more on this topic, ETFDB has a good post, 7 Risks of Trading Leveraged ETFs and How to Avoid Them.

FAQs

What is an inverse ETF?

An inverse exchange-traded fund, or inverse ETF, moves in the opposite direction of a specified investment or index. Investors who cannot short securities because of account restrictions, liquidity, or inability to find stock to short can still take a bearish position by buying an inverse ETF.

How does an inverse ETF work?

Inverse ETFs are managed to generate the exact opposite return of a specific investment or index for a specified period, typically a day. For example, the expected one-day return of a portfolio invested 50% into an S&P 500 index fund and 50% into an inverse S&P 500 index fund should be zero.

What is an inverse ETF for Dow Jones?

ProShares offers three ETFs that are managed to provide returns that perform in the opposite direction of the Dow Jones Industrial Average. The ProShares Short Dow 30 (DOG) targets unlevered inverse daily returns, while the ProShares UltraShort Dow 30 (DXD) is managed to generate two times the inverse daily returns, and the ProShares UltraPro Short (SDOW) seeks to return three times the inverse daily returns of the Dow Jones Index.

Are short ETFs safe?

Short ETFs, otherwise known as inverse ETFs, use complicated financial derivatives to achieve their investment objectives. They are best suited for sophisticated traders or long-term investors seeking to temporarily hedge long-term positions. Derivative users (both managers and investors) have occasionally made errors that led to catastrophic losses.

Can you short a 3X leveraged ETF?

You may be able to short a 3X leveraged ETF if you can borrow the shares, but the real question is why you would want to. It is likely easier to buy another ETF that accomplishes the same purpose. Though you may be able to make occasional short-term arbitrage profits, they will be slim and difficult to capture consistently unless you have institutional-quality IT infrastructure.

trending_downOptions to shorts

Instead of shorting a 3x leveraged ETF, an alternative is to use put options on the underlying index ETF (like QQQ or SPY). It's sometimes simpler (although still best used only by experienced traders), limits risk to the premium paid, and avoids the costs and complexities of shorting shares.

What is the difference between inverse ETFs vs. short selling?

Inverse ETFs let you profit from a decline in an index or sector without borrowing shares or using margin. They trade like regular ETFs and are easy to buy and sell in most brokerage accounts. Short selling, on the other hand, involves borrowing shares and selling them with the goal of buying them back at a lower price. Shorting comes with unlimited risk, potential borrowing costs, and margin requirements while inverse ETFs offer limited loss potential and can be used in tax-advantaged accounts like IRAs.

What is the best inverse ETF for a bear market?

There’s no single “best” inverse ETF for all bear markets as it heavily depends on what you're trying to hedge or bet against. For broad market exposure, funds like SH (1x inverse S&P 500), SDS (2x), or SPXU (3x) are common picks. If you're targeting tech, SQQQ offers 3x inverse exposure to the Nasdaq-100. Just keep in mind: the higher the leverage, the higher the risk. Additionally, these funds are meant for short-term use, not long-term holding.

About the Editorial Team

Blain Reinkensmeyer has 20 years of trading experience with over 2,500 trades placed during that time. He heads research for all U.S.-based brokerages on StockBrokers.com and is respected by executives as the leading expert covering the online broker industry. Blain’s insights have been featured in the New York Times, Wall Street Journal, Forbes, and the Chicago Tribune, among other media outlets.

Jeff Anberg is a Senior Editor at StockBrokers.com. Along with years of experience in media distribution at a global newsroom, Jeff has a versatile knowledge base encompassing the technology and financial markets. He is a long-time active investor and engages in research on emerging markets like cryptocurrency. Jeff holds a Bachelor’s Degree in English Literature with a minor in Philosophy from San Francisco State University.

Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.