Japanese retail investors pull out of bear fund as Nikkei hits 26-year peak

Tokyo

JAPANESE retail investors are pulling out of a popular bear market fund as a rally in the benchmark Nikkei index to 26-year highs prompts many market participants to ditch their contrarian strategies.

The fund is designed to pay investors two times the opposite of the Nikkei benchmark index's daily return, by making short positions in Nikkei futures. So if the Nikkei falls one per cent, the inverse ETF rises 2 per cent and if the Nikkei rises 2 per cent, the inverse ETF falls 4 per cent.