With Monday’s jump of 1.94%, yields on 10-year U.S. government bonds have risen a startling 15.5% since July 19. That yield spike has claimed predictable victims across a variety of rate-sensitive asset classes, including real estate investment trusts.

Rising rates have triggered outflows from major REIT ETFs such as the $3.4 billion iShares U.S. Real Estate ETF (NYSEArca: IYR) as investors have become fearful that higher borrowing costs for REITs could force some of these companies to devote more cash to debt servicing rather than to dividends, the impetus that pushed many income investors into REITs in the first place. [ETF Traders Bet Against, MLP, REITs and Utilities]

Investors can hedge existing long positions in REIT ETFs and even profit from declines in those funds with inverse and leveraged ETFs like the ProShares UltraShort Real Estate (NYSEArca: SRS). SRS seeks daily investment results “that correspond to two times the inverse (-2x) of the daily performance of the Dow Jones U.S. Real Estate Index,” according to ProShares.

The Dow Jones U.S. Real Estate Index is the underlying index for IYR, an ETF that has fallen 12% since July 19. That would imply a gain of 24% for SRS, but the ProShares offering has been even better than that, soaring more than 27% over that time. [Higher Rates May Push REIT ETFs Into Red For 2013]

Among leveraged ETFs, SRS does not grab the same level of attention as some of the more popular ProShares offerings such as the ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT) or the ProShares Ultra QQQ (NYSEArca: QLD). However, SRS does have solid average daily of nearly 293,000 shares. SRS had $57.1 million in assets under management at the end of the second quarter, according to ProShares data.

Investors that opt to give SRS a spin as a rising rates play should also monitor the price action in REITs including Simon Property (NYSE: SPG), American Tower (NYSE: AMT), Public Storage (NYSE: PSA) and HCP (NYSE: HCP) as that quartet represents about 20% of the Dow Jones U.S. Real Estate Index’s weight.

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