Leveraged Funds to Watch as 10-Year Treasury Yield Hits 3-Week High

Federal government stimulus has been the Treasury investor’s best friend as of late, which helped to drive the benchmark 10-year yield up to a 3-week high recently. The Treasury Department will be increasing the size of its debt auctions in order to fund the latest stimulus measures to battle the economic effects of COVID-19.

Additionally, the Treasury will offer its newest issue, the 20-year note, starting on May 20.

“You’ve seen the longer end of the yield curve steepen in the last few days. The total supply was not a surprise, and the size of the 20-year came above expectations,” said Tom Graff, head of fixed income at Brown Advisory, in an interview. “But the 10-year note doesn’t need to be at 2% to get all this debt-funded.”

As these events unfold, here are four ETFs short-term traders can use for Treasurys:

1. Direxion Daily 20+ Year Treasury Bull 3X Shares (NYSEArca: TMF): seeks daily investment results, before fees and expenses, of 300% of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. 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.
2. Direxion Daily 20+ Year Treasury Bear 3X ETF (NYSEArca: TMV): seeks daily investment results before fees and expenses of 300% of the inverse (or opposite) of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. 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.
3. Direxion Daily 7-10 Year Treasury Bull 3X Shares (NYSEArca: TYD): seeks daily investment results, before fees and expenses, of 300% of the daily performance of the ICE U.S. Treasury 7-10 Year Bond Index. The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than seven years and less than or equal to ten years.
4. Direxion Daily 7-10 Year Treasury Bear 3X Shares (NYSEArca: TYO): seeks daily investment results before fees and expenses of 300% of the inverse (or opposite) of the daily performance of the ICE U.S. Treasury 7-10 Year Bond Index. The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than seven years and less than or equal to ten years.

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