Tariffs. Trade wars. Tech crackdowns. Inflation worries.
Let’s face it—markets aren’t exactly calm right now.
If you’ve been watching your portfolio with one eye closed lately, you’re not alone. Volatility is back, and it’s making investors everywhere a little jittery.
But here’s the good news: tough markets don’t mean you have to sit on your hands or panic-sell your positions. In fact, there are smart, strategic ETFs (Exchange-Traded Funds) designed to help you protect your portfolio—or even benefit—during turbulent times.
Here are a few categories of ETFs worth considering right now—and some top options within each one.
🛡 Inverse ETFs – For Betting Against the Market
Inverse ETFs are designed to go up when the market (or specific sectors) go down. Think of them like protective gear—they don’t guarantee profits, but they can help hedge your portfolio when stocks are falling.
Examples to consider:
- SDS (ProShares UltraShort S&P 500): Targets 2x the inverse of the S&P 500. If the index drops 1%, SDS aims to rise 2%.
- SOXS (Direxion Daily Semiconductor Bear 3x): Focused on the semiconductor sector, this ETF seeks 3x the opposite of daily semiconductor performance.
- SQQQ (ProShares UltraPro Short QQQ): Designed to return 3x the opposite of the Nasdaq-100 index—great if you think tech stocks are about to slide.
- TBT (ProShares UltraShort 20+ Year Treasury): Bets against long-term U.S. Treasury bonds. If rates rise, TBT can benefit.
- TZA (Direxion Daily Small Cap Bear 3x): Targets 3x the inverse of small-cap U.S. stocks—good for bearish sentiment on smaller companies.
🪙 Gold ETFs – For Playing It Safe With a Classic Hedge
Gold has been a go-to safe haven for centuries. When markets get rocky, gold often shines. These ETFs offer exposure to gold prices without having to hold the metal physically.
Gold ETF picks:
- GLD (SPDR Gold Shares): The largest gold ETF, it tracks the price of physical gold bullion.
- GLDM (SPDR Gold MiniShares Trust): A lower-cost version of GLD, designed for cost-conscious investors.
- BAR (GraniteShares Gold Trust): Another affordable way to gain gold exposure, with physically backed assets.
- IAU (iShares Gold Trust): A popular and low-fee option for tracking gold prices.
- SGOL (Aberdeen Standard Physical Gold Shares): Stores gold in secure Swiss vaults and appeals to those wanting transparency in storage.
💰 Bond ETFs – For Stability and Steady Income
Bonds may not be flashy, but they’re often solid in stormy markets. Bond ETFs can help balance your portfolio, offer income, and reduce overall risk.
Bond ETFs to explore:
- ANGL (VanEck Fallen Angel High Yield Bond ETF): Focuses on “fallen angels”—bonds downgraded from investment-grade but with strong recovery potential.
- BNDX (Vanguard Total International Bond ETF): Offers global bond exposure, excluding the U.S., with currency hedging.
- LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF): Tracks high-quality corporate bonds—a steady option for income seekers.
- MUB (iShares National Muni Bond ETF): Invests in U.S. municipal bonds, which are often tax-exempt.
- PHB (Invesco Fundamental High Yield Corporate Bond ETF): A strategic take on high-yield corporate bonds based on fundamentals.
- SMB (VanEck Short-Term Municipal Bond ETF): Ideal for investors seeking lower risk and shorter durations in the muni bond space.
⚡️ Leveraged Inverse ETFs – For the Bold and Tactical Investor
These are the high-voltage cousins of inverse ETFs. They aim to deliver 2x or 3x the opposite of daily market movements. These ETFs are not for the faint of heart—but used wisely, they can be powerful tools in the short term.
Options to watch:
- DOG (ProShares Short Dow30): Moves opposite to the Dow Jones Industrial Average.
- EFZ (ProShares Short MSCI EAFE): Designed to short major developed markets outside the U.S. and Canada.
- EUFX (ProShares Short Euro): Bets against the euro relative to the U.S. dollar.
- KOLD (ProShares UltraShort Bloomberg Natural Gas): A double-leveraged inverse play on natural gas prices.
- QID (ProShares UltraShort QQQ): A 2x inverse ETF tied to the Nasdaq-100.
- RWM (ProShares Short Russell 2000): Aims to profit when small-cap stocks fall.
- SQQQ (yes, again!): With 3x inverse exposure to the Nasdaq-100, it’s one of the most actively traded bearish ETFs around.
Final Thoughts: Stay Calm, Stay Smart
Market turbulence can be nerve-racking—but it also creates opportunity. Whether you want to hedge your portfolio, reduce risk, or bet tactically on market declines, ETFs give you flexible, affordable options.
Just remember: many of these ETFs, especially the leveraged ones, are designed for short-term moves—not long-term holds. Do your research, know your risk tolerance, and invest with a clear plan.