Been looking for a decent way to play US 30 year bonds on the long and short side through ETFs. I found TLT and TBT, but these are 20 years maturity. I overlaid against US Z9, the Dec Bond Future, but they lag, I guess because they are 20 years and not 30.... So, back to the question: are there any decent bond ETFs that can easily be traded on the long and short side that have good liquidity, low costs and correlate closely to US 30 year bond futures, US Z9? Very grateful for any thoughts or ideas. Best regards Ridu
tlt is the best one which you identified. It is a fund however of 20+ year maturities. However it marks up well against the other broad market ETFs in that it has negative correlations. I trade the SPY against the tlt but never short the tlt. Instead I allocate my funds. I am always either 80% spy 20% tlt or vice versa depending on the 100 day moving average of the ratio tlt/spy. Being short the long bond is crazy in my opinion because you will have to pay out the dividend/interest distributions. Instead I think of the TLT as my hedge against being long the SPY or vice versa. The only truth in the stock market is when the shit hits the fan, investors flock to US treasuries or the long bond to get the yeild and backing of the US gov't. Of course , if you believe the US is going bankrupt holding US paper is risky. But that is a risk I'll take.