Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

A short exchange traded fund (ETF), or inverse ETF, is a type of exchange traded fund which aims to rise in value if its benchmark falls in value.

Short ETF definition

A short exchange traded fund (ETF), or inverse ETF, is a type of exchange traded fund which aims to rise in value if its benchmark falls in value.

Short ETFs work by utilising short-selling, futures contracts and other derivatives to create an investment that moves in an inverse direction to its benchmark. For example, if the FTSE 100 increased in value, an inverse ETF which tracks the FTSE will decrease in value, and vice versa.

Investing in a short ETF is a form of going short, but negates the risk of unlimited losses often associated with other short trades, as the maximum loss is the amount you have invested in the ETF.

 

Learn more about ETFs

Find accumulated distribution ETFs using our ETF screener or learn more about ETF trading with IG.

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