@nithin Any possibility of an Inverse ETF in India?
What’s the reason behind one not existing yet in the Indian market?
First time reading about Inverse ETF. Made me search google and understood the meaning. It seems there are no Inverse ETF in India, but the same is listed in Hong Kong and China Market. (Not sure if this is correct). Someone said that it was Govt restricting the introduction of Inverse ETF.
Wish we have this type of ETF as well.
Thanks for the post, learnt something new.
It seems to be very popular in the US. ETF’s in general are quite popular in the US.
Quite tough to see how that can happen considering SEBI doesn’t allow mutual funds to short.
@Bhuvan do you have more info on this?
Along with shorting, you also need a proper swaps market, which is how these funds gain exposure. Moreover, they are really complex to understand, most people think that you can buy and hold them, when in fact the leverage is reset daily. Considering SEBI’s stance on such products, tough to see this happening anytime soon.
Also, even in the US, there’s been a lot of noise over these instruments. Several asset managers are lobbying for a change in nomenclature so that retail guys don’t get misled into think they are ETFs—which they are not. They’ve proposed nomenclature like ETP- exchange traded products.
https://twitter.com/choffstein/status/1630293638159773698?t=rkwa8COZx6R_bexTdl_FRQ&s=19
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Yeah. People won’t put an effort to understand the underlying mechanism. At the same time I feel, all the options should be there to make a choice.
Note - Like leveraged ETF gets killed if market moves in a zig zag manner and people won’t realize why its happening.