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The IMF warns of rising bond market risks amid mounting debt, inflation and AI borrowing. Explore four inverse bond ETFs that could benefit from rising yields.
Global bond yields are surging on inflation and fiscal worries. Here are 3 inverse ETFs that could benefit from further bond weakness.
ProShares Short High Yield (NYSEARCA:SJB - Get Free Report) saw a large increase in short interest in March. As of March 13th, there was short interest totaling 985,931 shares, an increase of 2,391.4% from the February 26th total of 39,573 shares. Currently, 34.6% of the company's shares are sold short. Based on an average daily
ProShares Short High Yield ETF provides inverse exposure to the Markit iBoxx® $ Liquid High Yield Index for hedgers, speculators, and underwriters. Fundamentally, we see option-adjusted spreads widening. A factor model quantifies our thematic argument. Interest coverage ratios bottomed earlier this year but a loss in global confidence could see ratios trend down again.
ProShares Short High Yield ETF is an inverse fund. The vehicle seeks daily investment results that correspond to the inverse (-1x) of the daily performance of the Markit iBoxx Liquid High Yield Index.
In my opinion, there are three reasons to hold a short position in high-yield debt. Interest rates are likely to continue to rise.
SJB shorts high yield corporate bonds. The fund has been a winner this year amid rising rates.
Junk bond exchange traded funds have taken a beating this year, and the blows may not let up any time soon. Year-to-date, the iShares iBoxx $ High Yield Corp Bond ETF (NYSEArca: HYG) declined 10.4% and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) decreased 10.9%.