ETF Spotlight on Direxion Daily 30-Year Treasury Bear 3x Shares (NYSEArca: TMV), part of a weekly series.
Assets: $400.5 million
Objective: Tracks the NYSE 20 Year Plus Treasury Bond Index, minus fees and expenses
Holdings: TMV owns Treasury bonds across a range of maturities; only debt rated AAA is included
What You Should Know
- Like all leveraged and inverse ETFs, TMV uses swaps to obtain its exposure
- It’s designed to deliver 300% of the inverse of its benchmark index
- TMV comes with an expense ratio of 0.97%
The Latest News
- Treasury bonds gave millions of investors some shelter during the most volatile periods in the recent U.S. economy
- Now that the economy is on more solid footing, the risk goes up that the Federal Reserve will raise interest rates
- When that happens, bond prices will decline and yields will go up, which means that you are at risk of losing principal if you own Treasury bonds at the time of rate increases
- Long-term debt is the most sensitive to rate hikes, making TMV an ideal way to play any such scenario, but as with all leveraged and inverse ETFs, it has risks; know them before you buy
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.