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4 Funds to Harness the Awakening Bear

Consider these short options while the market looks shaky

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PIMCO StocksPLUS AR Short Strategy

PIMCO185Bond managers can be a pessimistic group. After all, they generally make money when interest rates are falling — and that often happens when the economy is lagging.

In light of this, it seems fitting that the world’s top bond manager, Bill Gross, manages a fund that shorts the S&P 500 — the PIMCO StocksPLUS AR Short Strategy (PSSAX) fund.

The PSSAX has a twist, however. Gross uses futures to short the S&P, meaning he only needs to put a fraction of money down as margin for his positions. He invests the rest of the capital in bonds.

The strategy has worked so far. Again using the 2008 financial crisis as an example, PSSAX tallied a 47% return amid the S&P 500’s 37% decline.

AR Short Strategy charges 1.04% in expenses and a maximum 3.75% sales charge, and requires a minimum investment of just $1,000.

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