Investing in bonds via global bond funds and ETFs  can be profitable — especially if interest rates are headed higher. If you think the bond market is moving that way, a new batch of bond ETFs from Direxion  allows traders and investors to capitalize on that trend.

The new Direxion ETFs are focused on the U.S. bond and U.S. Treasury market and do not use daily leverage. Direxion specializes in exchange traded funds that generate two-times or three-times returns of specific indexes or investments., but these bond ETFs are not designed that way. The bond funds are as follows:

Direxion Daily Total Bond Market Bear 1x Shares (NYSE: SAGG): The SAGG bond ETF aims for daily investment results, before fees and expenses, of 100% of the inverse or opposite of the price performance of the Barclay’s Capital U.S. Aggregate Bond Index. SAGG’s annual expense ratio is 0.65%.

Direxion Daily 7-10 Year Treasury Bear 1x Shares (NYSE: TYNS): The TYNS bond ETF seeks daily investment results, before fees and expenses, of -100% of the inverse of the price performance of the NYSE 7-10 Year Treasury Bond Index. TYNS’ expense ratio is 0.65%.

Direxion Daily 20 Year Plus Treasury Bear 1x Shares (NYSE: TYBS): The TYBS bond ETF seeks daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the price performance of the NYSE 20 Year Plus Treasury Bond Index. There is no guarantee the fund will meet its stated investment objective.

Direxion also offers bull and bear ETFs with 3x leverage long and short exposure to U.S. Treasuries with 7-10 year durations and 20+ year durations.

Short Junk Bond ETF

Investors who are bearish on investing in bonds with “junk” ratings should look at a newly introduced fund called the ProShares Short High Yield ETF (NYSE: SJB). The fund aims for 1x daily opposite performance of the Markit iBoxx $ Liquid High Yield Index. SJB’s annual expense ratio is 0.95%.

Sovereign Bond ETNs

Deutsche Bank and Invesco PowerShares Capital Management launched six ETNs linked to foreign sovereign bond futures. These will be the first ETNs to provide investors with leveraged or unleveraged exposure to the U.S. dollar value of the returns of German sovereign bond futures, Italian sovereign bond futures and Japanese sovereign bond futures. These ETNs expand upon Deutsche Bank’s product line-up that already includes leveraged ETNs linked to US Ultra T-Bond Futures.

The new ETNs trade under the following ticker symbols:

• PowerShares DB German Bond Futures ETN (NYSE: BUNL)
• PowerShares DB 3x German Bond Futures ETN (NYSE: BUNT)
• PowerShares DB Italian Treasury Bond Futures ETN (NYSE: ITLY)
• PowerShares DB 3x Italian Treasury Bond Futures ETN (NYSE: ITLT)
• PowerShares DB Japanese Govt Bond Futures ETN (NYSE: JGBL)
• PowerShares DB 3x Japanese Govt Bond Futures ETN (NYSE: JGBT)

The returns of each ETN are obtained by combining the month-over-month performance or three times the month-over-month performance of the DB USD Bund Futures Index, the DB USD BTP Futures Index or the DB USD JGB Futures Index, as applicable, with the monthly returns of the DB 3-Month T-Bill Index, less an investor fee.

The DB USD Bund Futures Index measures the performance of a long investment in Euro-Bund Futures, the DB USD BTP Futures Index measures the performance of a long position in Euro-BTP Futures and the DB USD JGB Futures Index measures the performance of a long investment in 10-year JGB Futures.

Traders or investors attempting to gain long or short leveraged exposure to sovereign debt using ETNs should be fully aware they are shouldering the credit risk of the issuer, which in this case, is Deutsche Bank AG. The DB notes are senior senior unsecured obligations.

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