Consequently, adding a little bit of an inverse Treasury bond exposure, such as TBT, could help lower overall interest rate risk without having to go down the yield curve, or sell longer-dated bonds and buy shorter-dated positions.
For the more adventurous, there are aggressive inverse options, such as the Direxion Daily 20-Year Treasury Bear 3X (NYSEArca: TMV), which takes the inverse -3x or -300% daily performance of the NYSE 20 Year Plus Treasury Bond Index.
However, investors who are more conservative may opt to take on something like the ProShares Short 20+ Year Treasury (NYSEArca: TBF), which tracks the inverse -1x or -100% daily performance of the Barclays U.S. 20+ Year Treasury Bond Index.
Potential investors, though, should be aware that these leveraged and inverse ETFs rebalance on a daily basis, so their long-term performances may not perfectly reflect their intended strategies, especially during periods of heightened volatility. [Do You Know How Your Leveraged ETFs Work?]
For more information on the Treasuries market, visit our Treasury bonds category.
Max Chen contributed to this article.