For those looking for a supercharged bet against Treasury prices, the ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT) provides a -200% return of long-term Treasuries. TBT is up 24.1% year-to-date. The ProShares UltraPro Short 20+ Year Treasury (NYSEArca: TTT) and Direxion Daily 20-Year Treasury Bear 3X (NYSEArca: TMV) reflect -300% return of Treasuries. TTT is up 35.4% year-to-date, and TMV gained 33.1% so far this year.
Potential traders should be aware that the inverse and leveraged products try to achieve their objective on a daily basis, and due to compounding of daily returns, the performance of the ETFs may diverge from the target return over extended periods, especially during volatile market conditions.
Inverse and leveraged ETFs can be used as a portfolio hedge against market turns. However, investors who are more comfortable with the strategy have utilized the ETFs as speculative plays.
For more information on Treasuries, visit our Treasury bonds category.