The economy appears to be improving, and so sometime this year interest rates are expected to rise. The Direxion 20-Year Treasury Bear 3x (NYSE:TMV) seeks daily results that correspond to three times the inverse (opposite) of the daily performance of the NYSE 20+ Year U.S. Treasury Bond Index.
The non-diversified fund creates short positions by investing at least 80% of its net assets in futures contracts and derivatives that in combination provide leveraged exposure to the index. It’s a “contra” type of fund, which means its purpose is to move in the opposite direction of the 20-year U.S. Treasury bond. If interest rates rise, bond prices should fall and TMV should rise.
This fund isn’t rated by Morningstar. Net expense ratio is 1.14%. Yesterday on an intraday basis, TMV broke from a triple top, and last week its 20-day moving average crossed through its 200-day moving average triggering a short-term buy signal. The target for this trade is $90. This ETF is also suggested as a long-term hedge against rising interest rates.
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