ETF News

ETFs 'offer outsized returns'

Buying puts on exchange traded funds (ETFs) offers "outsized rewards" with relatively little risk, according to the Motley Fool.

The financial news site explains that puts on ETFs can allow investors to bet against positive performance in specific markets - such as technology.

Should the market sector chosen perform badly, the article suggests that substantial returns can be expected.

However, if the investor's prediction of poor performance does not materialise, the amount of money lost is no more than the premium paid on the put itself.

Puts could be one way to make positive returns from ETFs during short-term market turbulence.

The Motley Fool adds that, while the stock market as a whole trends upwards in the long term, over shorter periods of volatility those who bet against the market are likely to make out "pretty well".

Readers were previously told that the range of ETFs available extends beyond "plain-vanilla funds" to cover specific industries, sectors and countries.