Direxion Daily 20+ Year Treasury Bear 3X Shares (TMV) — This fund seeks daily investment results of 300% of the inverse of the performance of the NYSE 20 Year Plus Treasury Bond Index.
The price of U.S. Treasury bonds falls when the Federal Reserve increases interest rates, and this ETF could rapidly appreciate when the Fed “tapers” its QE policies. Since history has shown that it is usually better not to fight the Fed, this appears to be an investment that could offset the negative impact of holding bonds.
On Wednesday, TMV broke from a 10-month consolidation. It has support at its 20-day moving average at $59.30. The annual expense ratio is 0.98%, and the trading target is $75.
Longer-term buyers may want to hold the less volatile, unleveraged ProShares Short 20+ Year Treasury (TBF) as a hedge against a bond portfolio since it should also provide protection against lower bond prices and higher interest rates (see June 12 Trade of the Day).
Inverse and leveraged funds use complex investment strategies and carry unique risk. They are not suitable for all investors.