Derek Webb, CFA ProShare Ultra Short 20+ yr Treasury ETF TBT-N PAST TOP PICK May 24, 2011

With this one, you are making a bet that US long bonds are going to decline. If you think interest rates are going up and bond prices are going to come down, this is a way to play it on a short-term basis and get 2 to 1 leverage. Every time you deal with a leveraged ETF, recognize that what they are doing is rolling over a series of futures contracts and there is a cost to doing that. That cost is implicit in the value of the product.

This is the ultra-short long treasuries, which is basically a levered product. With this one you are betting against the Fed which recently announced they are going to be buying 10-30 year bonds until the economy improves. You will have a buyer against you for a long time, however if the economy succeeds, the yield should increase. You have the time against you so you have to be careful. Wait until you see growth rates really pick up in manufacturing, consumers and housing.

This ETF basically moves inversely to 20 year+ US bonds. This is double leveraged so it is one that you use as a trading vehicle. Amazed that they have not been able to lower interest rates lower than they have.

(A Top Pick July 20/13. Down 16.67%.) Took some money out of this, but continues to trade it, as opposed to investing. At some point he expects interest rates are going to go up, and rather quickly.

Shorting Bonds? He suggests an inverse ETF. It is probably a good trade, but not a huge trade. Unless you time it right it is tough.

Inverse Bond ETF’s? The graph shows a higher low each time. With the expectation of rates going up, he expects it to move up. He would look at this on a month-to-month basis. Q2 is where he would be looking at acquiring bonds, if there are some hiccups and a deflation theme is starting again.

This is a bet against bonds and a bet that interest rates are going up. It is also  a great portfolio hedge especially with portfolios that have a high percentage of equities. There has been a long term decline in bond yields but a reversal is starting. However this doesn't mean that a return to previous highs is coming. It is a good time to buy now with minimal risk but be temperate in your position.

It's leveraged and holds a basket of 20-year bonds. It's the most liquid of its kind, but is quite volatile. Tend to peak at $32, though has broken that. He keeps buying it. It benefits you as interest rates go higher--a great hedge.

There is an ETF, TBT, that shorts US bonds. Very difficult for an individual to do on their own. Good idea to hold it as a hedge.