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Can you hedge against a market crash with ETFs? – MoneySense
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That approach, however, comes with trade-offs. Higher fees are a real issue, as many alternative strategies rely on active management. Complexity is another. Finding ETFs that genuinely diversify returns rather than just repackage familiar risks is not easy. And even when you get the construction right, one major gap remains. The portfolio is not designed to protect against a true market crash. When I say crash, I mean sudden, deep, double-digit drawdowns like those seen during the 2008 financial crisis or the sudden collapse in March 2020 at the onset of the COVID-19 pandemic.
Source: Testfolio.io
In the sections that follow, I will walk through two ETF approaches that retail investors have access to, highlighting Canadian-listed options where available. It is worth noting up front that the Canadian market is far more limited than the U.S. in this area, but you still have a few options.
And while these strategies can offer protection in specific scenarios, there is no free lunch. As you will see, the costs, complexity, and implementation challenges often make crash-hedging ETFs difficult to use effectively, even for experienced investors.
Option 1: Inverse ETFs
Inverse ETFs are designed to be short-term trading tools that aim to deliver the opposite return of a benchmark over a single trading day. Most track broad market indexes, though some focus on specific sectors or even individual stocks. The key point is that their objective resets daily. They are not built to provide long-term protection.
A well-known U.S. example is the ProShares Short S&P 500 ETF (NYSEArca:SH). On any given trading day, SH targets a return equal to negative one times the daily price return of the S&P 500. If the index rises 1%, SH should fall about 1%. If the index drops 1%, SH should rise about 1%. In practice, it does a reasonable job of delivering that daily inverse exposure.
For investors seeking stronger downside protection, leveraged inverse ETFs are also available. These apply leverage to magnify the inverse relationship. An example is Direxion Daily S&P 500 Bear 3X Shares (NYSEArca:SPXS), which targets negative three times the daily return of the S&P 500. If the index falls 1% in a day, SPXS aims to rise roughly 3%. If the index rises 1%, SPXS should fall about 3%.
Canadian investors have access to similar products now. Instead of using U.S.-listed ETFs, investors can look at options such as the BetaPro -3x S&P 500 Daily Leveraged Bear Alternative ETF (TSX:SSPX).
During sharp selloffs, these ETFs can do exactly what they are designed to do. During the March 2020 COVID-related market panic, as the S&P 500 plunged, inverse ETFs like SH and leveraged versions such as SPXS rose sharply, with the leveraged funds moving by a much larger magnitude.
Source: Testfolio.io
As the chart above shows, the problem with these ETFs turns up once the panic passes. As markets recovered after March 2020, both unleveraged and leveraged inverse ETFs began to fall steadily. This highlights the core limitation of these products: you cannot buy and hold inverse ETFs if you accept that, over time, equity markets tend to rise. A permanent short position against the broad U.S. stock market is structurally a losing bet, which is why issuers are careful to emphasize that these products are intended for day trading only.
That creates another challenge. Using inverse ETFs effectively requires anticipating the crash and positioning just before it happens, then exiting before the recovery begins. That is market timing, and it’s not only an active strategy; it requires being right twice. Even professional investors struggle with this consistently, and retail investors tend to fare worse.
The long-term outcomes reflect those headwinds. Over a roughly 17.1-year period from November 5, 2008, to December 18, 2025, a buy-and-hold investment in inverse ETFs like SH and SPXS would have effectively gone to zero after many reverse splits.
Source: Testfolio.io
That outcome is driven by several factors. First, the underlying benchmark generally trends upward over long periods. Second, inverse ETFs carry relatively high fees, with expense ratios of 0.89% for SH and 1.02% for SPXS. Third, daily compounding works against investors in volatile markets. When prices swing up and down, the daily reset causes losses to compound faster than gains, creating volatility drag.
In short, inverse ETFs can provide short-term protection during sudden market declines, but using them as crash insurance requires precise timing. That makes them difficult to implement effectively and risky to hold for longer than a few days.
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Tony Dong, MSc, CETF
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Stock news for investors: Canopy Growth to acquire MTL Cannabis in $125-million deal – MoneySense
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Canopy Growth chief executive Luc Mongeau says MTL’s cultivation expertise, combined with his company’s scale, positions it to improve product quality, expand supply and accelerate its path to profitable growth.
Under the terms of the agreement, MTL shareholders will receive 0.32 of a common share of Canopy Growth and 14.4 cents in cash for each MTL share they hold. Canopy shares closed at $2.40 on the Toronto Stock Exchange on Friday.
The deal requires regulatory and MTL shareholder approval. Closing of the transaction is expected to occur before the end of February.
Source Google BlackBerry reports Q3 profit of US$13.7M, up from a loss a year ago
BlackBerry (TSX:BB)
Numbers for its third quarter of 2025:
- Profit: $13.7 million (up from loss of $10.5 million a year ago)
- Revenue: $141.8 million (down from $143.6 million)
BlackBerry Ltd. reported a third-quarter profit of US$13.7 million, up from a loss of US$10.5 million during the same period a year earlier. The Waterloo-based software company, which keeps its books in U.S. dollars, said Thursday that its earnings per share came in at two cents US, flat compared with the prior year quarter.
BlackBerry says its revenue reached US$141.8 million for the period ended Nov. 30, down from US$143.6 million during the third quarter last year.
John Giamatteo, BlackBerry CEO, says in a press release that the company’s QNX segment reached an all-time high for revenue. QNX segment revenue came in at US$68.7 million, rising 10 per cent from US$62.3 million a year earlier.
Giamatteo says the company’s higher-than-expected overall revenue, coupled with ongoing cost discipline efforts, helped it achieve its strongest profitability in nearly four years during the quarter.
Source Google Transat A.T. reports $12.5M Q4 loss compared with $41.2M profit a year ago
Transat A.T. (TSX:TRZ)
Numbers for its fourth quarter of 2025:
- Loss: $12.5 million (down from profit of $41.2 million a year ago)
- Revenue: $771.6 million (down from $788.8 million)
Travel company Transat A.T. Inc. reported a loss of $12.5 million in its latest quarter compared with a profit of $41.2 million in the same quarter last year. The company says the loss amounted to 52 cents per diluted share for the quarter ended Oct. 31 compared with a profit of $1.05 per diluted share a year earlier.
Revenue in what was Transat’s fourth quarter totalled $771.6 million, down from $788.8 million a year ago when it benefited from compensation related to Pratt & Whitney GTF engine issues. Excluding the impact of this lower compensation, Transat says revenue increased by 1.5 per cent compared with a year ago.
On an adjusted basis, Transat says it lost 42 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
Last week, Transat narrowly avoided a costly work stoppage when it reached a new tentative contract with its pilots.
Source Google MoneySense’s ETF Screener Tool
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The Canadian Press
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How to tap into AI growth while managing risk – MoneySense
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The tech sector has seen significant volatility recently, as speculation mounts on whether there’s an AI bubble percolating after a major rally. For young investors looking for a piece of the action, experts say with the right strategy, it’s possible to participate without risking it all.
Align AI investing with risk tolerance and goals
Dhanji said he usually begins with the basics—assessing his client’s risk profile and financial goals. “Not everyone can tolerate the risks of AI companies because they are more volatile,” Dhanji said.
Investing in AI no longer has to mean owning shares of big-name tech companies. Nvidia, Meta Platforms, and AMD, among others, have been seen as proxies for the AI sector in recent years, but they are not the only options. Companies across the board have now bet huge sums of money on AI and its productivity promises.
If the client’s goals are long-term, such as retirement savings, then having some AI exposure in their portfolio can complement other asset classes, Dhanji said. The volatility of AI stocks makes them unsuitable for short-term financial goals. For example, if you’re saving money to start a business or buy a house, it’s better to keep AI stocks out of the mix.
Another risk, he said, is that technology is evolving so quickly that what you own today may be outdated in a year’s time. “You have to be careful in terms of what you’re investing in,” Dhanji said.
Balanced approach recommended for investing in AI stocks
Most investors Ryan Lee hears from are aware of the volatility, but they want to buy in anyway. Lee, a certified financial planner and founder of Twain Financial, said picking individual AI stocks to invest in can be an “overly risky” move. He also said it’s important to keep in mind how those AI stocks fit in your long-term investment strategy.
Certain index funds in your portfolio might already have exposure to AI companies—such as an exchange-traded fund (ETF) that tracks the Nasdaq. “When you hold a diversified portfolio, you already have exposure,” he said.
Lee said it’s difficult nowadays to ignore AI stocks. “There is AI in the future … and there is going to be growth,” Lee said. “But we just don’t know when that growth is going to happen or whether or not that growth is going to be higher than other industries.”
Instead of picking individual stocks, some investors might look to AI-centric ETFs, but Dhanji warned against over-concentration. If a young investor has a long-term time horizon, Dhanji recommends 10% to 15% of their portfolio can be allocated to the AI sector. But if the investor is more conservative, Dhanji suggested capping their AI exposure to 5% of the portfolio—or not holding any AI ETFs or stocks at all if that money will be needed in the next three years or so.
Whatever the financial goal and time horizon may be, Dhanji recommended shying away from AI names that are buzzy social media recommendations. “My advice is to avoid the hype train,” Dhanji said. “I’d rather people focus on the companies themselves, making sure they have strong balance sheets and cash flows.”
Dhanji said investing in quality companies with strong balance sheets will help your portfolio weather extreme fluctuations in the market long term, if the AI bubble were to burst. “My recommendation is to have that financial plan in place, know what your cash flows look like, and instead of investing a lump sum all at once and timing the market, you can then dollar average into the market over time,” he said.
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The Canadian Press
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Rowan Chapman Sells 4,366 Shares of Natera (NASDAQ:NTRA) Stock
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Natera, Inc. (NASDAQ:NTRA – Get Free Report) Director Rowan Chapman sold 4,366 shares of the company’s stock in a transaction that occurred on Friday, December 5th. The stock was sold at an average price of $243.10, for a total value of $1,061,374.60. Following the transaction, the director directly owned 5,777 shares in the company, valued at approximately $1,404,388.70. This trade represents a 43.04% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website.
Natera Stock Performance
Shares of Natera stock opened at $233.13 on Thursday. The stock has a market capitalization of $32.25 billion, a PE ratio of -101.80 and a beta of 1.63. Natera, Inc. has a 52 week low of $125.38 and a 52 week high of $246.90. The stock has a 50 day moving average price of $204.00 and a two-hundred day moving average price of $175.57.
Natera (NASDAQ:NTRA – Get Free Report) last issued its earnings results on Friday, November 7th. The medical research company reported ($0.64) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.39) by ($0.25). Natera had a negative return on equity of 25.07% and a negative net margin of 14.61%.The firm had revenue of $592.18 million during the quarter, compared to the consensus estimate of $514.55 million. During the same quarter in the prior year, the business earned ($0.26) earnings per share. Natera’s revenue for the quarter was up 34.7% on a year-over-year basis. Research analysts forecast that Natera, Inc. will post -1.49 EPS for the current year.
Hedge Funds Weigh In On Natera
A number of hedge funds and other institutional investors have recently modified their holdings of the business. PNC Financial Services Group Inc. boosted its position in Natera by 42.5% in the first quarter. PNC Financial Services Group Inc. now owns 4,206 shares of the medical research company’s stock worth $595,000 after purchasing an additional 1,255 shares during the last quarter. ASR Vermogensbeheer N.V. bought a new stake in shares of Natera during the 1st quarter worth $243,000. Charles Schwab Investment Management Inc. boosted its holdings in shares of Natera by 4.4% in the 1st quarter. Charles Schwab Investment Management Inc. now owns 905,676 shares of the medical research company’s stock worth $128,072,000 after buying an additional 38,180 shares during the last quarter. Deutsche Bank AG grew its position in Natera by 185.8% during the first quarter. Deutsche Bank AG now owns 246,482 shares of the medical research company’s stock valued at $34,855,000 after buying an additional 160,243 shares during the period. Finally, Mitsubishi UFJ Asset Management Co. Ltd. grew its position in Natera by 224.7% during the first quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 141,641 shares of the medical research company’s stock valued at $20,029,000 after buying an additional 98,015 shares during the period. Hedge funds and other institutional investors own 99.90% of the company’s stock.
Analyst Upgrades and Downgrades
NTRA has been the subject of a number of analyst reports. Royal Bank Of Canada set a $268.00 price objective on shares of Natera and gave the company an “outperform” rating in a report on Tuesday, September 2nd. BNP Paribas Exane upgraded Natera from an “underperform” rating to a “neutral” rating and set a $172.00 price target for the company in a research note on Monday, October 27th. Weiss Ratings reissued a “sell (d-)” rating on shares of Natera in a report on Wednesday, October 8th. BNP Paribas upgraded Natera to a “hold” rating and set a $172.00 target price on the stock in a report on Monday, October 27th. Finally, Barclays lifted their target price on Natera from $210.00 to $230.00 and gave the company an “overweight” rating in a research report on Friday, November 7th. Fifteen investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, Natera currently has a consensus rating of “Moderate Buy” and an average target price of $225.29.
Check Out Our Latest Stock Analysis on NTRA
About Natera
Natera, Inc, a diagnostics company, develops and commercializes molecular testing services worldwide. Its products include Panorama, a non-invasive prenatal test that screens for chromosomal abnormalities of a fetus, as well as in twin pregnancies; Horizon carrier screening test for individuals and couples determine if they are carriers of genetic variations that cause certain genetic conditions; Vistara single-gene NIPT screens for 25 single-gene disorders that cause severe skeletal, cardiac, and neurological conditions; Spectrum, preimplantation genetic tests for couples undergoing IVF; Anora that analyzes miscarriage tissue from women; Empower, a hereditary cancer screening test; and non-invasive prenatal paternity product, which allows a couple to establish paternity without waiting for the child to be born.
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ABMN Staff
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