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Inverse Leveraged Treasury ETF (TYO) Hits New 52-Week High

Sweta Killa
Comtech Telecommunications (CMTL) closed the most recent trading day at $26.47, moving +1.26% from the previous trading session.

For investors seeking momentum, Direxion Daily 7-10 Year Treasury Bear 3X Shares TYO is probably on radar now. The fund just hit a 52-week high and is up about 20% from its 52-week low price of $13.12/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

TYO in Focus

This fund seeks to deliver three times (300% or 3x) the inverse of the performance of the ICE U.S. Treasury 7-10 Year Bond Index. The underlying index is market-value weighted and includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than seven years and less than or equal to 10 years. TYO charges 0.95% in expense ratio (see: all the Inverse Bond ETFs here).

Why the Move?

The Treasury corner of the fixed income world has been an area to watch given the spike in yields. This is because 10-year yields have jumped to above 3%, marking the highest level since early 2014. A recent rise in commodity prices, especially oil and metals, has lifted inflation expectations, which in turn is fueling speculation of faster-than-expected rates hike for this year. Since yields and bond prices have a negative relationship, Treasuries have beaten down and thus benefited their inverse counterparts.

More Gains Ahead?

TYO remains strong given a mediocre weighted alpha of 13.41% and a low 20-day volatility of 11.45%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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DIR-D 7-10T BR3 (TYO): ETF Research Reports
 
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