ProShares Short 20+ Year Treasury ETF

TBF

Market cap $69.5M

Stanley Druckenmiller's bet against America's debt is no ordinary trade.

TBF is a small ETF now; however it was a much bigger one a few years ago. But it is just as viable and useful to me as ever. This ETF runs counter to the price of long-term bond funds like TLT, but it does much more than that if we are open-minded and risk-averse. TBF can be used to hedge bonds, stocks, or exploit higher rates or stagflation scenarios for profit.

A rise in yields is likely to benefit a few corners of the market. Investors seeking to capitalize on the opportune moment should consider these ETFs.

Matthew Tuttle talks to Rob Isbitts about Wall Street's selfishness problem. ETFs are the next logical evolution for mutual funds, offering transparency, tradability, and tax advantages that mutual funds lack.

The spike in yields has led to a surge in ETFs that bet against U.S. Treasury bonds.

The ECB cut rates by 25bp as widely anticipated, but a slightly hawkish tilt bear flattened the EUR curve, which in our view remains priced aggressively. In the US, as the markets head towards the Fed's first rate cut, the probability of a larger cut rose slightly on Thursday.

The U.S. Treasury yields are on the rise with the start of second-quarter 2024, as the hopes for interest rates cut in June cooled down following the hotter-than-expected manufacturing data.

It generally takes a few years for changes in Federal Reserve rates to fully impact bond fund dividends. Bond funds are still benefitting from prior rate hikes. Perhaps by enough to cancel out any future rate cuts. By my estimations, and under current Fed guidance, most bond funds would only start to see declining dividends in 2025, at the earliest.

The long-dated Treasuries posted their biggest two-day loss in months leading to a surge in ETFs that bet against U.S. Treasury bonds.

TBF may be useful as CPI data comes out next week which we expect to stoke fears of the stickiness of inflation. Leveraged ETFs have daily resetting returns and should be used over short durations due to value erosion and volatility drift. Moreover, TBF is sensitive to rate changes due to high duration. We are more confident in the longer-term realisation of markets than the shorter term in inflation's stickiness.