Five Inverse ETFs Your Broker Forgot To Mention

For all the controversy surrounding leveraged and inverse ETFs, it's almost unfathomable that any member of this sub-sector of the ETF universe could go unnoticed. The reality is plenty of nifty inverse and leveraged ETFs are not as popular as one might think and with the broader market fresh off a May swoon (and not looking much better to start June), now is a fine time for investors to think like traders and employ some short-term hedges in their portfolios. Obviously, the critical factor with leveraged and inverse ETFs is understanding what these funds are about and it's spelled out for the world in the funds' prospectuses. Nearly every leveraged ETF out there is intended for short-term use. In other words, don't hold a leveraged or inverse ETF the way Warren Buffett holds shares of Coca-Cola KO and you'll keep losses to a minimum. Let's look at five unheralded leveraged and inverse plays. 1) Direxion Daily Gold Miners Bear 2X Shares DUST: Home to one of the most appropriate tickers in the ETF world, DUST is also a fine way to hedge exposure to an ETF like the Market Vectors Gold Miners ETF GDX or just be outright short gold miners themselves. Not a bad idea since miners have lagged the underlying yellow metal this year. 2) Direxion Daily India 2X Bear Shares INDZ: For as popular as traditional India-specific ETFs have been, INDZ has been somewhat of a disappointment as it less than $4 million in assets under management. Making INDZ's AUM conundrum even more curious has been the slack performance of India ETFs this year. Forget all that. If you can keep an eye on your positions intraday, INDZ offers plenty of volatility and great moves over one to three day holdings periods. 3) ProShares UltraShort Utilities SDP: With everyone and his sister looking to play defense these days, SDP probably isn't an ETF you want to jump into with right this minute. Put it on the back burner for when risk appetite and the high beta trade return. When that happens, SDP will prove useful as investors shuffle out of stodgy utilities stocks. 4) PowerShares DB Base Metals Short ETN BOS: BOS isn't leveraged, but it makes for an ideal play in this environment with so many jittery investors and pundits fretting about global economic growth. If global growth is really slowing, why not be short aluminum, copper and the like all in one fund? 5) Direxion Daily Russia 3X Bear Shares RUSS: OK, so RUSS just made its debut last week, but it is the first leveraged, inverse play on Russia and it is immediately useful. If the market bid up ETFs like the Market Vectors Russia ETF RSX due to rising oil prices, RUSS represents an excellent option for a short-term hedge on long Russia exposure AND for establishing a short oil position.