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Inverse Bond ETFs: Highlighting All The Options

Michael Johnston — Mon, 25 Apr 2011 11:00:39 +0000

Investors have been slowly embracing exchange-traded products as a tool for accessing fixed income exposure in recent years, gradually becoming more comfortable with the nuances of bond ETFs and the potential limitations involved when combining this product structure and asset class. As long-term buy-and-holders have increased usage of ETFs as a way to maintain fixed income exposure, those investors with more of a short-term focus have also turned towards ETFs as an efficient way to bet against bonds [see Are Bond ETFs Broken?]. In recent months investors have seemingly adopted an increasingly bearish outlook on fixed income in general, expressing concerns that a confluence of economic factors and developments are pointing towards a tough stretch for all types of bonds, from Treasuries to high yield debt. Contracting credit spreads on corporate debt has raised some red flags, while the recent warning from S&P on the outlook for the U.S. seemed [...]

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Three Short Treasury Bond ETFs To Invest Like Bill Gross

Eric Dutram — Tue, 12 Apr 2011 11:00:22 +0000

As the American equity markets have come back strongly in 2011, many investors are growing increasingly concerned that the Federal Reserve will have to raise rates in the near future in order to combat rising commodity prices in an effort to stop inflation from wrecking havoc on the U.S. economy. Thanks to this notion, as well as concerns about the debt ceiling and mounting debt burden, some bond managers are becoming increasingly skeptical of the U.S. Treasury market. While many have voiced concerns, few warnings have commanded more attention that the one voiced recently by legendary fixed income guru Bill Gross of PIMCO. Gross, who runs the world’s largest bond fund, has been a harsh critic of U.S. fiscal and monetary policy in the months past, simultaneously pulling the fund out of a large chunk of its U.S. sovereign debt holdings. While this move certainty attracted some attention, the King [...]

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ProShares Launches Two Short Treasury ETFs

Eric Dutram — Wed, 06 Apr 2011 11:00:21 +0000

Investors have taken up an increasingly bearish outlook towards fixed income in recent month, as inflationary pressures continue to build and an ongoing economic recovery has increased the likelihood of rate hikes before the end of 2011. The last several weeks have seen ETF issuers roll out a number of products designed to offer inverse exposure to bonds–funds that could perform well if fixed income investments struggle in coming months. ProShares has rolled out the first ETFs offering daily inverse exposure to junk bonds and investment grade corporates recently, and this week continued building out the fixed income segment of its ETF lineup with two more products focusing on short exposure to Treasuries. The two new ProShares ETFs that began trading on Thursday include: Short 7-10 Year Treasury ETF (TBX): This fund seeks to track the inverse return of the Barclays Capital 7-10 Year U.S. Treasury Bond Index. The underlying [...]

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ProShares Launches Short Investment Grade Corporate Bond ETF (IGS)

Michael Johnston — Thu, 31 Mar 2011 06:00:26 +0000

ProShares, the largest issuer of inverse and leveraged ETFs, continues to build out the portion of its product lineup offering opportunities to gain short exposure to fixed income securities. The new Short Investment Grade (IGS) will seek to deliver daily results that correspond to the inverse of the iBoxx $ Liquid Investment Grade Index, a benchmark is a modified market-value weighted index designed to provide a balanced representation of U.S. dollar-denominated investment grade corporate bonds. That benchmark serves as the underlying to the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD), which has nearly $13 billion in assets. “There are signs that investment grade corporate bonds could possibly be richly valued relative to historical levels. Since the financial crisis, investment grade corporate bond indexes have reached record highs, and credit spreads have tightened significantly,” said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares’ investment advisor. “For [...]

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ProShares Debuts Short Junk Bond ETF (SJB)

Michael Johnston — Tue, 22 Mar 2011 13:30:34 +0000

ProShares, the Maryland-based firm known for a suite of leveraged and inverse ETFs, has launched the first ETF offering daily inverse exposure to junk bonds. The ProShares Short High Yield (SJB) will seek to deliver daily results that correspond to -100% of the daily change in the iBoxx $ Liquid High Yield Index. That index serves as the underlying for the ultra-popular iShares iBoxx $ High Yield Corporate Bond Fund (HYG), which has more than $8 billion in assets and consists of more than 400 individual junk bonds. ETFs have become a popular vehicle for investors seeking exposure to high yield bonds; there are now nine funds in the High Yield Bonds ETFdb Category with aggregate assets of about $16 billion. SJB (think “Short Junk Bonds”) will offer a way to bet against junk bonds, an investment strategy that has seen increased interest in the current environment. Junk Bond Bubble? [...]

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Direxion To Close Daily Two-Year Treasury ETFs

Eric Dutram — Tue, 16 Nov 2010 22:22:11 +0000

Direxion, one of the largest providers of leveraged ETFs, has been extremely active on the product development front in 2010, rolling out a number of products that offer investors an opportunity to double down (or triple down) on various asset classes. But the company’s product line will shrink a bit in coming weeks, as firm has announced that it will close down the Daily 2-Year Treasury Bull 3x Shares (TWOL) and the Direxion Daily 2-Year Treasury Bear 3x Shares (TWOZ). The closure was recommended by Rafferty Asset Management, the adviser for the Direxion Shares ETF Trust. “Direxion is focused on only offering solutions that provide exposure to tradable sectors and markets,” said Dan O’Neill, President and CIO in a press release. “We believe in delivering products that directly meet the demands of sophisticated investors who seek to capitalize on changing market conditions. While interest in 2-Year Treasuries has fallen, investors [...]

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JPMorgan Rolls Out Leveraged Treasury ETNs

Michael Johnston — Wed, 06 Oct 2010 13:47:09 +0000

JPMorgan, the financial behemoth responsible for the first exchange-traded product offering exposure to the MLP sector, expanded its ETN lineup on Tuesday by introducing two products offering inverse leveraged exposure to Treasuries. The new ETNs, the Double Short U.S. Long Bond Treasury Futures ETN (DSTJ) and the Double Short U.S. 10 Year Treasury Futures ETN (DSXJ), offer investors options for leveraging rising rates views at the medium and long parts of the U.S. Treasury curve. DSXJ will seek to deliver 200% inverse leveraged exposure to the NYSE US 10 Year Treasury Futures Index, a benchmark that seeks to replicate the returns of maintaining a long position in the medium part of the U.S. Treasury curve. DSTJ will offer inverse leveraged exposure to the NYSE US Long Bond Treasury Futures Index, a benchmark that seeks to replicate the returns of maintaining a long position in the longer dated end of the [...]

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Shorting Long-Term Treasuries: Four Different ETF Plays

Michael Johnston — Tue, 21 Sep 2010 17:00:36 +0000

With lingering uncertainty over the outlook for the global economy, safe havens have generated a tremendous amount of interest this year. While much of the attention has focused on gold and its continued run to new record highs, it is another asset class that has stolen the show in 2010. Long-term Treasuries have climbed steadily higher during 2010, defying the predictions of many “experts” and thriving on a wave of risk aversion. The popular Barclays 20-Year Treasury Bond Fund (TLT) has gained about 17% on the year, while the Vanguard Extended Duration Treasury Index ETF (EDV) has added more than 23%. Now, with equity markets showing some signs of life, investors are beginning to wonder if the impressive run-up is due for a sharp reversal. Peter Schiff is just one well-known investor who thinks a huge bubble has formed under Treasuries. “The bond market is the mother of all bubbles [...]

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The Definitive Inverse ETF Guide: Short/Bear ETFs 101

Andy H — Thu, 05 Nov 2009 23:00:20 +0000

As the stock market continues to rise, seemingly running ahead of fundamentals, more and more investors are becoming concerned that the stocks are becoming overvalued, and that a downward correction may be just around the corner. While safe haven investments such as the U.S. dollar and gold are popular picks for investors looking to profit from a decline in asset prices, the inverse correlation between these investments and equities is far from perfect. A growing number of investors are beginning to utilize inverse ETFs to accomplish a wide range of investment goals, ranging from establishing hedges in their portfolios to speculating on a pullback in prices. If used correctly, these products can be very powerful, but they can be complex and come with a number of risks that should be carefully considered. Taking a short position in certain asset classes is, of course, noting new. Investors have been utilizing short [...]

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ProShares Launches Inverse Treasury ETF

Michael Johnston — Thu, 20 Aug 2009 15:52:59 +0000

ProFunds Group, a leading provider of inverse and leveraged ETFs, launched today an ETF designed to provide short exposure to the market for long-term U.S. Treasuries. The ProShares Short 20+ Year Treasury (TBF) is designed to deliver the inverse of the return on the Barclays Capital 20+ Year U.S. Treasury Index for a single day. “This new ETF is a useful addition to our two ProShares ETFs currently offering short exposure to the U.S. Treasury market—the ProShares UltraShort 7-10 Year and UltraShort 20+ Year Treasury funds,” said Michael L. Sapir, ProFunds Group Chairman and CEO. “We are introducing this new ProShare in direct response to strong investor demand for a single beta short treasury fund.” TBF is the latest ProShares products offering inverse and leveraged exposure to Treasuries. Other ProShares ETFs include: UltraShort 7-10 Year Treasury (PST) UltraShort 20+ Year Treasury (TBT) Despite the controversy over leveraged and inverse ETFs [...]

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ETF Database » TBF

Inverse Bond ETFs: Highlighting All The Options

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