With U.S. markets in the red, investors are looking to ETF safety of government bonds with the CBOE Volatility Index (VIX) currently sitting at 22.79, up 5.18 (29.42%) as of 2:30 pm ET Monday.
Investors can gain exposure to Treasuries through various ETFs, such as the iShares 7-10 Year Treasury Bond ETF (IEF) for an intermediate-term focus or something like the iShares 20+ Year Treasury Bond ETF (TLT) for later-dated Treasuries exposure.
IEF seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities between seven and ten years. The ETF seeks to track the investment results of the ICE U.S. Treasury 7-10 Year Bond Index. The iShares 20 plus Year Treasury Bond ETF seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than 20 years.
Using volatility exposure to hedge risks
Other investors have turned to volatility exposure to hedge risks, such as the iPath Series B S&P 500 VIX Short Term Futures ETN (VXX), ProShares VIX Short-Term Futures ETF (VIXY) and VelocityShares Daily Long VIX Short-Term ETN (VIIX). Volatility typically rises when stocks pullback, so owning volatility is seen as a type of market insurance.
The VIX is a widely observed indicator for investor sentiment in the stock market and measures the expected or implied volatility of large-cap stock options traded on the S&P 500 index. ETFs that track VIX futures allow investors to profit during rising volatility or hedge against short-term turns. However, it has grown more expensive to hedge.
Leveraged Gold ETF Plays
Traders looking for leverage can use funds like the Direxion Daily Gold Miners Bull 3X ETF (NYSEArca: NUGT) and the Direxion Daily Jr Gold Miners Bull 3X ETF (NYSEArca: JNUG).
NUGT is trading up 12.31% while JNUG is up 16.34% on Monday afternoon.
NUGT seeks daily investment results, before fees and expenses, of either 300% or 300% of the inverse (or opposite) of the performance of the NYSE Arca Gold Miners Index. while JNUG seeks daily investment results, before fees and expenses, of 300% or 300% of the inverse (or opposite) of the performance of the MVIS Global Junior Gold Miners Index.
Santelli Exchange: Excess supply and the Fed
Click play below to hear Mizuho Securities Chief U.S. Economist Steven Richhiuto and CNBC’s Rick Santelli discuss yields, the Fed and the economy:
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