These new funds allow investors to go three times long or short on 10-year and 30-year Treasury bonds, essentially making a bet on rates. The indexes give 300% the daily performance, or 300% the inverse, of the NYSE Current 10- and 30-year U.S. Treasury indexes.
The new funds are known as:
- Direxion Daily 10-Yr Treasury Bull 3x Shrs (TYD)
- Direxion Daily 30-Yr Treasury Bull 3x Shrs (TMF)
- Direxion Daily 10-Yr Treasury Bear 3x Shrs (TYO)
- Direxion Daily 30-Yr Treasury Bear 3x Shrs (TMV)
The current rate on a 10-year bond is 2.76%; on a 30-year, it’s 3.66%. Treasuries were mixed after Wednesday, and longer-term bonds saw their yields rise slightly, reports Nick Godt for MarketWatch. Signs of improvement in the economy, however slight, tend to decrease the appeal of U.S. government debt.
Adding to pressure on the debt is that foreigners sold another $97 billion in net U.S. assets in February, the second consecutive decline following a $146.9 billion drop in January.
Also, Direxion will be changing the name of all of its ETFs to inclue the word “daily,” to better reflect that these funds seek daily investment goals and should be used only as short-term trading vehicles. Leveraged ETFs have become more popular, and along with that has come attention. Leveraged and short ETF providers have done a great job of educating investors about these tools.
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.