An ETF like Ranger Bear, shorting stocks, doesn't face that issue, but shorting stocks is expensive and results in a high expense ratio. It's also very risky and can result in big losses. "I never recommend ETFs that have such high expense ratios, since they will have to really outperform the market so as to justify these kind of fees," said Mishra at Zacks Investment Research.
Shorting ETFs may appeal to traders and investors looking for a short-term opportunity but should never be used as long-term investments, according to Mishra. And any fund with leveraged or inverse exposure to the market is intended for a single-day trade only.
"We haven't done well during the market rebound," said Ranger Equity Bear's Dell Vecchio. "But we provide insurance for portfolios. There's a butt-kicking coming. It will hurt a lot of people. But we don't know if it's this year."
"I can't find a single reason to give this ETF anything resembling an endorsement," Johnson said. He pointed to a simpler, traditional investment option for investors pessimistic about the stock market that should not be neglected: "There are far better ways to hedge against volatility, such as low-cost diversified bond ETFs," he said.
Britt said the bond argument is always a valid one, but with yields so low right now, there is an opportunity cost to sitting in Treasuries all the time. That's one reason why all of these other risk modifications strategies are trending. "Traditional diversification is not that attractive right now," said Britt at FactSet Research Systems.
— By Constance Gustke, special to CNBC.com