Bull and bear ETFs have shown immense potential this month as abrupt changes in sentiments have raised the appeal for these products. A bull ETF makes money in an upward market while a bear ETF gains when the market goes down. These products create a long/short position with a leveraged factor (i.e. 2x or 3x) in the underlying index through the use of swaps, options, future contracts and other financial instruments.

Wall Street is caught in a bull bear tug-of-war this month. Bears were fierce in early March on Trump's steel and aluminum imports tariff news that spooked markets, flaring up inflation fears and threats of a trade war. Then faster-than-expected rates hike and the Facebook (FB – Free Report) led tech selloff continued to prompt bears.

Additionally, the bullish long-term fundamentals, which include strong corporate earnings, optimism surrounding Trump's tax cut policies, pick-up in growth in developed and developing economies, robust job gains, growing wages, increasing consumer spending, a recovering housing market and a record level of consumer confidence, are continuously driving the nine-year bulls.

Based on the above discussion, we have highlighted the performance of the bull and bear ETFs from the hot zones that have grabbed headlines this month.

Blue-Chip

After the worst week in two years, the Dow Jones Industrials Average logged its biggest one-day gain in about a decade on Monday trading session. Bear ETFs ProShares UltraShort Dow 30 (DXD – Free Report) and ProShares UltraPro Short Dow30 (SDOW – Free Report) have overtaken the bull ETFs this month. But their close race will likely continue in the coming weeks given that volatility is showing no sign of abating.