Using ETFs As “Portfolio Insurance”

Although there are now nearly 1,100 exchange-traded products available to U.S. investors, the universe of ETFs utilized by most long-term buy-and-holders is considerably smaller. Beyond the “plain vanilla” portfolio building block ETFs, recent years have seen the introduction of hundreds of more targeted and complex ETPs that offer exposure to exotic asset classes and regions of the world. Many of these more specialized exchange-traded products aren’t of much interest to those in it for the long haul; they are more appropriate for more active traders looking to capitalize on short-term pricing inefficiencies or implement a sophisticated investment strategy. But some of the ETFs that investors may be inclined to brush off as tools for traders may actually make a lot of sense as a minor allocation in some long-term portfolios. Below, we profile three ETFs that may be effective as “portfolio insurance” against a prolonged downturn in stock markets. These [...] Click here to read the original article on ETFdb.com. Related Stories: Financials Tax Puts Insurance ETFs In Focus Five ETFs To Give Your Portfolio Much-Needed Diversification How to Build Your Own Ivy Endowment Portfolio Using ETFs