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Tom Lydon, ETF Trends (176 clicks)
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ETF Spotlight on Direxion Daily 20-Year Plus Treasury Bear 3x Shares (NYSEArca: TMV), part of a weekly series.

Assets: $400.5 million

Objective: Tracks the NYSE 20-Year Plus Treasury Bond Index, minus fees and expenses

Holdings: TMV owns Treasury bonds across a range of maturities; only debt rated AAA is included

What You Should Know

  • Like all leveraged and inverse ETFs, TMV uses swaps to obtain its exposure
  • It’s designed to deliver 300% of the inverse of its benchmark index
  • TMV comes with an expense ratio of 0.97%

The Latest News

  • Treasury bonds gave millions of investors some shelter during the most volatile periods in the recent U.S. economy
  • Now that the economy is on more solid footing, the risk goes up that the Federal Reserve will raise interest rates
  • When that happens, bond prices will decline and yields will go up, which means that you are at risk of losing principal if you own Treasury bonds at the time of rate increases
  • Long-term debt is the most sensitive to rate hikes, making TMV an ideal way to play any such scenario, but as with all leveraged and inverse ETFs, it has risks; know them before you buy

Treasury Bond ETFs, TMV, Leveraged ETFs

Source: ETF Spotlight: Direxion Daily 20-Year Plus Treasury Bear 3x Shares