Do inverse ETFs work for hedging a portfolio?

Briefly, yes; structurally, no. An inverse ETF delivers the opposite of its index's return for a single day; held longer, the daily reset compounds into decay whenever markets chop or rise — which is most of the time. Our 2021–2026 backtests on SH, SDS, SQQQ and peers show what buy-and-hold of an inverse fund actually looks like: relentless bleed punctuated by brief crash spikes. They're tactical instruments for expressing a days-to-weeks bearish view, not portfolio insurance. If you want persistent downside protection, reducing position size, holding cash, or a regime filter that exits in downtrends are all structurally cheaper than paying an inverse fund's decay indefinitely.