# ProShares Short 20+ Year Treasury ETF (TBF)



## Belguy (May 24, 2010)

One of the 'top picks' on BNN last week was the ProShares Short 20+ Year Treasury ETF (TBF):

http://www.proshares.com/funds/tbf.html

I would be interested in any opinions concerning this ETF and why it might be included in a balanced portfolio.

Thanks!!


----------



## andrewf (Mar 1, 2010)

Meh. I don't think speculating on the exact timing of the normalization of interest rates is as easy as it sounds. Many observers (myself included) expected interest rates to rebound much faster than they have. Turns out we were wrong.


----------



## bflannel (Apr 21, 2013)

An ETF created with the hopes of market timing on the short...every day. No thanks.

I can't see the upside of shorting broadly right now so soon after 2008, 2011. That is now only in the recent past?? I would rather go short on one solo pick or a few to hedge my positions but I honestly can't see this ETF ever being useful for me. 

I will jump up and waive my hand telling you I know very little about this subject though.

Cheers,
B


----------



## james4beach (Nov 15, 2012)

Belguy said:


> One of the 'top picks' on BNN last week was the ProShares Short 20+ Year Treasury ETF (TBF):
> 
> http://www.proshares.com/funds/tbf.html
> 
> I would be interested in any opinions concerning this ETF and why it might be included in a balanced portfolio.


This is a day trading vehicle. The only thing it's supposed to do is track the daily movement of the index (notice it's in bold on their web page). It is not appropriate as a long term holding, so I would advise against holding it in your portfolio. It's not meant for this.

These inverse ETFs are notorious for having terrible performance in longer periods. ProShares even warns you right on their web page: "Due to the compounding of daily returns, ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks."

This has been a big problem with ProShares. They've been sued over it, too. That lawsuit alleged that the ProShares product was defective because it failed to do what ProShares promised. Since then ProShares has been more careful explaining that the product is meant to track *daily* movements. That's all it's designed to do! You'll notice the same with many Horizons products.

If guests on BNN are recommending these inverse or leveraged funds, they probably don't understand how to use the vehicle. I notice some BNN guests misunderstand Horizons ETFs too. Many people assume that daily tracking translates to longer term tracking. It doesn't, for some complicated reasons.

Instead, if you want to make a bet that interest rates are going higher, you can do so by either holding cash or very short-term bonds (this is what I do).


----------



## andrewf (Mar 1, 2010)

My best advice: stop watching BNN, especially the call-in show with the genius fund managers. Those shows are almost as depressing as watching Hoarders.


----------



## Retired Peasant (Apr 22, 2013)

Watch it, but treat it as anti-advice?


----------

