ProShares Launches Inverse Treasury ETFs | ETF Trends

ProShares, known for its long/short leveraged exchange traded funds (ETFs), has recently launched a new addition that will cover the short-term U.S. Treasury market.

This week’s timing was fortuitous as Treasury bonds came under pressure Wednesday and investors fretted over a potential government shutdown. [Treasury ETFs Pressured As Budget Deadline Looms.]

On Tuesday, Proshares launched its UltraShort 3-7 Year Treasury ETF (NYSEArca: TBZ) and Short 7-10 Year Treasury ETF (NYSEArca: TBX), writes Murray Coleman for Barron’s. ProShares already has a short Treasuries ETF, but the fund targets long-term Treasuries, and these new additions will help ETF investors hedge with short-term Treasury options.

TBZ will try to reflect twice the inverse daily performance of the Barclays Capital 3-7 Year Treasury Index and TBX will try to reflect the inverse daily performance of the Barclays Capital 7-10 Year Treasury Index, reports Olivier Ludwig for IndexUniverse. The two funds both have an expense ratio of 0.95%. It should be noted that the funds rebalance daily, and long-term returns will vary from the underlying indexes.

The fund provider is catering to those who believe that fixed-income positions will take a hit as interest rates begin rising — bond prices and yields move in opposite directions.

PIMCO’s Bill Gross stated that Treasuries have “little value” due to the growing U.S. debt load. More high-profile investors are voicing bearish concerns about Treasuries and some are saying the multi-decade bull market in U.S. government bonds is ending. [Treasury ETFs: Bill Gross Talks Book On Bonds.]

For more information on U.S. Treasuries, visit our Treasury bonds category.

  • Direxion Daily 2-Year Treasury Bear 3x Shares (NYSEArca: TWOZ)
  • Direxion Daily 10-Year Treasury Bear 3x Shares (NYSEArca: TYO)
  • ProShares Short 20+ Year Treasury (NYSEArca: TBF)
  • ProShares UltraShort 7-10 Year Treasury (NYSEArca: PST)

Max Chen 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.