Consequently, bond investors may consider inverse or bearish Treasury bond ETF strategies to hedge against further declines in the Treasuries market and rising yields.
For instance, the ProShares Short 20+ Year Treasury (NYSEArca: TBF) and Direxion Daily 20+ Year Treasury Bear 1x Shares (NYSEArca: TYBS) take the simple inverse or -100% daily performance of Treasury bonds that mature in over 20 years.
For more aggressive bond traders, the ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT) tries to reflect the -2x or -200% daily performance of the Barclays U.S. 20+ Year Treasury Bond Index. The ProShares UltraPro Short 20+ Year Treasury (NYSEArca: TTT) takes the -3x or -300% daily performance of the Barclays U.S. 20+ Year Treasury Bond Index. Additionally, the Direxion Daily 20-Year Treasury Bear 3X (NYSEArca: TMV) tracks the -3x or -300% daily performance of the NYSE 20 Year Plus Treasury Bond Index.
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Potential traders, though, should be aware of the risks associated with these geared products and keep in mind that leveraged and inverse ETFs are designed to produce their target strategies on a daily basis. Consequently, when investors look at the long-term performance of a leveraged or inverse ETF, people may notice that the funds do not perfectly reflect their intended strategies.