scroll

Thoughts on TBF:US

Advanced Search

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 14/04/2022

Thoughts on TBF:US

James and team, I really appreciate your daily commentary and find it compliments information I receive from other investment information sources. I have been particularly interested in your Fixed Interest commentary as it is an investment class that I do not understand particularly well. To this end I am invested directly in bonds through FIIG and also in TBF:US. Given the significant volatility in this asset class, I am wondering what your current view is on TBF:US. Thanks again.

Answer

Hi Ian, thanks for the kind words.

The TBF is the Proshares Short 20+ year Treasury ETF – it shorts bonds which means it is long bond yields. The majority of bonds are fixed rate so carry duration risk. i.e. when rates go up, bond prices fall and the longer dated the bond the bigger the influence. The TBF would work as an interest rate hedge against the interest rate risk in a bond portfolio, in other words, it makes sense here. In the short term, I suspect the price of the TBF may pullback as yields pullback, however over time interest rates are likely to track higher and this security benefits from that theme.

chart

Proshares Short 20+ Year Treasury ETF (TBF US)

LAST UPDATED 14/04/2022 11:40

Latest Reports

Afternoon report 17/02/2025

The Match Out: ASX dips as Bendigo (BEN) & Westpac (WBC) lead the banks lower

While the ASX closed in the red, it was a big turnaround from early weakness with a large sell-off in the banks, headlined by Bendigo (BEN) & supported by Westpac (WBC) weighing on the market early, however, from 1pm onwards the buyers stepped up pushing the main board more than +60 points above the session lows as reporting season continues to deliver a mixed bag, with a positive bias.

Morning report 17/02/2025

Macro Monday: Step up the RBA – we hope!

It's no secret that the RBA is expected to cut rates this week, with the futures market calling it an “87% probability.” However, the accompanying rhetoric is likely to drive local stocks in the coming weeks, especially with the market looking for two additional cuts into Christmas, taking the Cash Rate to 3.6%. Local rates have sat at a restrictive 4.35% since November 2023, and we think three cuts are likely to prove too dovish; Michele Bullock's comments on Tuesday will be a classic case of the devil being in the detail.