“However, the last couple of days the rise in yields has been fast and a bit unexpected. Most investors seem to be positioned for a decrease in yields. Fast rising rates brings corporate debt sustainability into play,” said Blokland.

“So if rates keep rising like this I expect volatility in equity markets, but as long as they don’t ramp up to let’s say 4% or so, I think this should be seen as positive. Also the yield curve is steepening, reducing recession odds,” Blokland added.

With benchmark Treasury yields rising and depressing government debt prices, here are three fixed-income ETFs to take advantage of this rising yield landscape.

1. Xtrackers Hi Yld Cor Bd Intst Rt Hdg ETF (BATS: HYIH)

HYIH seeks investment results that correspond generally to the performance of the Solactive High Yield Corporate Bond-Interest Rate Hedged Index–more high yield to appease Axelrod’s appetite for risk. HYIH will invest at least 80% of its total assetsin instruments that comprise the underlying index, such as long positions in U.S. dollar-denominated high yield corporate bonds and shorts in U.S. Treasury notes or bonds of approximate equivalent duration to the high yield bonds.

2. ProShares High Yield—Interest Rate Hdgd (BATS: HYHG)

HYHG tracks the performance of the Citi High Yield (Treasury Rate-Hedged) Index and allocates 80% of its total assets in high-yield bonds and short positions in Treasury Securities in order hedge against rising rates. Because HYHG invests in high-yield bonds, there is credit risk associated with the higher yield since the fund invests in corporate issues that are less than investment-grade, but by targeting a duration of zero, HYHG offers less interest rate sensitivity versus its short-term bond peers.

3. WisdomTree Interest Rt Hdg Hi Yld Bd ETF (NasdaqGM: HYZD)

HYZD seeks to track the price and yield performance of the BofA Merrill Lynch 0-5 Year U.S. High Yield Constrained, Zero Duration Index, which provides long exposure to the BofA Merrill Lynch 0-5 Year U.S. High Yield Constrained Index while seeking to manage interest rate risk through the use of short positions in U.S. Treasury securities. The majority of the fund’s total assets will be invested in the component securities of the index and investments that have economic characteristics that are similar in nature.

For more trends in fixed income, visit the Fixed Income Channel.