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Investors Are Betting On Higher Interest Rates With This ETF

January 25th, 2010

interest-rates“The UltraShort 20+ Year Treasury ProShares (TBT) is a bet on higher long-term interest rates,” says Jack Adamo. In his Insiders Plus newsletter, the advisor explains,”The fund is structured to respond at double the inverse of U.S. Treasuries of 20 years or longer.

“I’ve followed the ETF for quite some time and have not seen any troublesome tracking problems; that is, the ETF does a good job of doing what it’s designed to do. This is purely a technical call on my part. We know that at some point the bond market will demand higher interest rates on these long-dated bonds. When that would be is way beyond my ken, fundamentally speaking. But it has to happen eventually, and the charts are suggesting pretty strongly it is now. One short-term indicator I like has already gone positive on the shares, and it looks like it may break into a positive intermediate-to-long-term formation as well,”  Steven Halpern Reports From Blogging Stocks.

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Here are some details on the UltraShort 20+ Year Treasury ProShares ETF (TBT):

The investment (TBT) seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Barclays Capital 20+ Year U.S. Treasury index. The fund normally invests at least 80% of assets to investments that, in combination, have economic characteristics that are inverse to those of the index. It also typically invests in taking positions in financial instruments, including derivatives that should have similar daily return characteristics as twice the inverse of the index. The fund is nondiversified.

TOP 10 HOLDINGS ( 5.64% OF TOTAL ASSETS)  
Company Symbol % Assets
20 Year Treasury Swap N/A 0.45
20+ Treasury Swap N/A 5.01
Proshares Ultrashort L B N/A 0.18

Chart for UltraShort 20+ Year Treasury ProShares (TBT)

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