Inverse index funds.

(From Business Line)

from BUSINESS LINE, October 23, 2006 Consider this: My friend has unrealised gains of 40 per cent generated over the last six months. He wants to protect his profits from the recent market volatility without selling his investments

My friend has been advised to buy inverse index funds to fulfil his objectives. What are inverse index funds? A typical index fund will move in the same direction as its benchmark index. A Nifty Index Fund, for instance, will move up nearly 5 per cent if the Nifty Index moves up 5 per cent

An inverse index fund will generate returns that will move in the opposite direction to the benchmark index. If …