“A nice spike in U.S. yields is just what markets needed, given how quiet things had got lately. Volatility has been trending lower all year, so a little rerun of the January panic over U.S. inflation and yields would clear the deck nicely for an autumn rally in equities,” said Chris Beauchamp, Chief Market Analyst at IG.
This spike in U.S. yields has certainly benefitted these five ETPs.
1. Barclays Inverse US Treasury Aggregate ETN (NasdaqGM: TAPR): 44.22% YTD
TAPR seeks a return linked to the performance of the Barclays Inverse US Treasury Futures Aggregate Index™. The index employs a strategy that tracks the sum of the returns of periodically rebalanced short positions in equal face values of each of the 2-year, 5-year, 10-year, long-bond and ultra-long U.S. Treasury futures contracts. The index contains an equal synthetic short position in each Treasury futures contract that is either the Treasury futures contract closest to expiration or the next Treasury futures contract scheduled to expire immediately following the front contract.
2. iPath US Treasury Long Bond Bear ETN (NasdaqGM: DLBS): 42.29% YTD
DLBS seeks to provide investors with inverse exposure to the Barclays Long Bond US Treasury Futures Targeted Exposure Index™. The index is designed to decrease in response to an increase in the long-dated Treasury bond yields and to increase in response to a decrease in long-dated Treasury bond yields. The index targets a fixed level of sensitivity to changes in the yield of the current “cheapest-to-deliver” bond underlying the relevant long-dated Treasury futures contract at a given point in time.
3. iPath US Treasury 10-year Bear ETN (NasdaqGM: DTYS): 37.92% YTD
DTYS seeks to provide investors with inverse exposure to the Barclays 10Y US Treasury Futures Targeted Exposure Index™. The index is designed to decrease in response to an increase in the 10-year Treasury note yields and to increase in response to a decrease in 10-year Treasury note yields. The index targets a fixed level of sensitivity to changes in the yield of the current “cheapest-to-deliver” note underlying the relevant 10-year Treasury futures contract at a given point in time.
4. ProShares UltraPro Short 20+ Year Treasury (NYSEArca: TTT): 29.77% YTD
TTT seeks daily investment results that correspond to three times the inverse (-3x) of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. The fund invests in derivatives that ProShare Advisors believes, in combination, should have similar daily return characteristics as three times the inverse (-3x) of the daily return of the index. The index is market value weighted and consists of designed to measure the performance of U.S. dollar-denominated, fixed rate securities with minimum term to maturity greater than twenty years.
5. Direxion Daily 20+ Yr Treasury Bear 3X ETF (NasdaqGM: TMV): 28.47% YTD
TMV seeks daily investment results that equal 300% of the inverse of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. TMV invests in swap agreements, futures contracts, short positions or other financial instruments that, in combination, provide inverse or short leveraged exposure to the index equal to at least 80% of the fund’s net assets . The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than 20 years.
For more trends in fixed income, visit the Fixed Income Channel.
