New iPath ETNs Play Both Sides of U.S. Treasury Market

July 18th at 1:52pm by Tom Lydon

Investors will have another way to play both directions of the U.S. Treasury market with the introduction of new exchange traded notes from Barclays. The new iPath ETNs have launched just as the markets are teetering on the uncertainty over the U.S. debt limit.

The iPath US Treasury 5 Year Bull ETN (NYSEArca: DFVL) and iPath US Treasury 5-Year Bear ETN (NYSEArca: DFVS) let investors bet for or against this sector of the Treasury market. The “bear” ETN profits when Treasury bond prices fall and yields rise. [Treasury ETFs Volatile on QE3 Talk.]

“The new ETNs allow investors the opportunity to further fine tune their exposures with long and short views on 5-Year U.S. Treasury futures,” said Kevin Burke, head of investor solutions at Barclays Capital.

The U.S. bond market could see volatility as the deadline on the U.S. debt ceiling looms. [Third Quarter Outlook: Life After QE3.]

Overall, Treasury ETFs have bounced in a range in recent weeks. They are currently looking for direction after recovering from a nasty fall in late June when the 5-year note absorbed much of the damage. [Treasury ETFs Fall]

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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