ProShares Launches Inverse Treasury ETFs

Includes: PST, TBF, TWOZ, TYO
by: Tom Lydon

ProShares, known for its long/short leveraged ETFs, has recently launched a new addition that will cover the short-term U.S. Treasury market.

This week’s timing was fortuitous as Treasury bonds came under pressure Wednesday as investors fretted over a potential government shutdown.

On Tuesday, Proshares launched its UltraShort 3-7 Year Treasury ETF (NYSEArca: TBZ) and Short 7-10 Year Treasury ETF (NYSEArca: TBX), writes Murray Coleman for Barron’s. ProShares already has a short Treasuries ETF, but the fund targets long-term Treasuries, and these new additions will help ETF investors hedge with short-term Treasury options.

TBZ will try to reflect twice the inverse daily performance of the Barclays Capital 3-7 Year Treasury Index and TBX will try to reflect the inverse daily performance of the Barclays Capital 7-10 Year Treasury Index, reports Olivier Ludwig for IndexUniverse. The two funds both have an expense ratio of 0.95%. It should be noted that the funds rebalance daily, and long-term returns will vary from the underlying indexes.

The fund provider is catering to those who believe that fixed-income positions will take a hit as interest rates begin rising — bond prices and yields move in opposite directions.

PIMCO’s Bill Gross stated that Treasuries have “little value” due to the growing U.S. debt load. More high-profile investors are voicing bearish concerns about Treasuries and some are saying the multi-decade bull market in U.S. government bonds is ending.

  • Direxion Daily 2-Year Treasury Bear 3x Shares (NYSEArca: TWOZ)
  • Direxion Daily 10-Year Treasury Bear 3x Shares (NYSEArca: TYO)
  • ProShares Short 20+ Year Treasury (NYSEArca: TBF)
  • ProShares UltraShort 7-10 Year Treasury (NYSEArca: PST)

Max Chen contributed to this article.