Don’t Fight the Fed — Buy This Fund

by Sam Collins | June 12, 2013 2:24 am

ProShares Short 20+ Year Treasury (TBF[1]) — This fund moves inversely (opposite) to the daily performance of the Barclays Capital 20+ Year U.S. Treasury Bond Index.

The price of Treasury bonds falls when the Federal Reserve increases interest rates and QE policies expire. Since history has shown that it is usually better not to fight the Fed, this appears to be an investment that could offset the impact of future Fed policy changes.

The trading target for TBF is $34, but longer-term buyers should hold the fund as a hedge against lower bond prices and higher interest rates.

There is also a triple-leveraged fund aggressive traders could consider — Direxion Daily 20+ Year Treasury Bear 3X Shares (TMV[2]).

Inverse and leveraged ETFs are not for all investors. They involve unique risk and complex investment strategies. The annual expense ratio of TBF is 0.95%, and the expense ratio for TMV is 0.98%.

TBF Chart
Click to Enlarge
Chart Key[3]

  1. TBF:
  2. TMV:
  3. [Image]:

Source URL:
Short URL: