Not-so-Boring Bonds: Leveraged U.S. Treasury ETFs Can Offer Macro Move Potential  

When traders think about leveraged ETFs, they typically envision fast-moving equity indexes, such as the Nasdaq-100^® or S&P 500^®. What doesn’t come to mind? Stable, income-generating bonds, which are typically the domain of long-term investors who want to derisk a portfolio.

But with macro forces often determining market movements and rate-sensitive asset classes whipping around in response to economic data releases, long-duration U.S. Treasuries are proving to be surprisingly volatile. That’s creating opportunities for sophisticated day traders who want a more targeted way to express views on everything from interest rates to U.S. Federal Reserve (Fed) policy to employment numbers and other macroeconomic news.

Leveraged and inverse-leveraged products are often used by sophisticated day traders to capitalize on volatile markets or market trends. Since these funds are only supposed to be held for a short period of time, like one day, you want your investment to move, say, half a percent, so you can potentially double or triple that gain. You may not find those types of returns in the short-term treasuries market, but the long end of the yield curve can be far more volatile.

That volatility stems from duration: the longer the term – typically 20 years or more – the more sensitive a bond’s price is to changes in yield. In fact, it may surprise some to learn that treasuries can experience price swings comparable to those of major equity indexes, particularly around data releases and policy events. According to S&P Global, as of October 22, 2025, the 200-day average (the moving average based on trading days) for the VIX, the index that measures volatility of the S&P 500, was 19.34, while the 200-day average for the CBOE 20+ Yr U.S. Treasury ETF was 16.17. In other years, such as 2023, when bond yields soared, long-term treasuries were more volatile than many equity indices.

Still, why would an investor potentially consider a Treasury ETF over an equity fund, which can also move on macro news? For some, it might be because the former could be viewed as more of a ‘pure play’ when it comes to economic indicators like inflation prints, labour-market releases and Fed commentary. While those same events will also weigh on equity markets, they move for plenty of other reasons, too. For instance, given the high concentration of the ‘Magnificent Seven’ within it, the Nasdaq-100^® could rise and fall on one company’s earnings or whether the market thinks there’s an AI bubble or not. Macro news can also be filtered through sector and sentiment effects.

By comparison, Treasury markets offer a cleaner way to invest around major economic indicators. If you don’t have to worry about competing reactions to equity and macro data, you can potentially make quick short-term gains by trading around economic news that can produce sharp intraday moves.

Sophisticated day traders have the opportunity to take advantage of these events through products like the BetaPro 3x and -3x U.S. Treasury 20+ Year Daily Leveraged Bull (and Bear) Alternative ETFs (TTLT and STLT, respectively).

As with all leveraged and inverse-leveraged ETFs, these funds reset daily, so they’re not designed for long-term holding.

Sophisticated day traders might use these ETFs to:

Historically, Canadian investors interested in leveraged exposure to U.S. Treasury markets often accessed those exposures through American-listed ETFs or futures contracts. With the introduction of leveraged Treasury-linked ETFs listed in Canada, there is now a way for investors to trade these exposures in Canadian dollars on a domestic exchange.

While leveraged, inverse and inverse-leveraged equity ETFs are commonly used for making tactical moves driven by events outside of key data, in a macro-driven market defined by interest-rate uncertainty and shifting economic narratives, long-term Treasuries offer some interesting short-term opportunities.

Leveraged Treasury ETFs aren’t intended for all investors and may be considered primarily by experienced traders looking to build exposure to short-term movements in interest-rate-sensitive markets.

Commissions, management fees and expenses all may be associated with an investment in products (the “Global X Funds”) managed by Global X Investments Canada Inc. The Global X Funds are not guaranteed, their value changes frequently and past performance may not be repeated. Certain Global Funds may have exposure to leveraged and inverse leveraged investment techniques that magnify gains and losses which may result in greater volatility in value and could be subject to aggressive investment risk and price volatility risk. Such risks are described in the prospectus. The prospectus contains important detailed information about the ETF. Please read the relevant prospectus before investing.

The Global X Funds include our BetaPro products (the “BetaPro Products”). The BetaPro Products are alternative mutual funds within the meaning of National Instrument 81-102 Investment Funds and are permitted to use strategies generally prohibited by conventional mutual funds: the ability to invest more than 10% of their net asset value in securities of a single issuer, to employ leverage, and engage in short selling to a greater extent than is permitted in conventional mutual funds. While these strategies will only be used in accordance with the investment objectives and strategies of the BetaPro Products, during certain market conditions they may accelerate the risk that an investment in shares of a BetaPro Product decreases in value.

The BetaPro Products consist of our Daily Bull and Daily Bear ETFs (the “Leveraged and Inverse Leveraged ETFs”), Inverse ETFs (the “Inverse ETFs”), and our BetaPro S&P 500 VIX Short-Term Futures™ ETF (the “VIX ETF”) and can offer opportunities for enhanced returns or hedging strategies, but it’s essential to understand and accept the associated risks. Leveraged ETFs aim to amplify the returns of an underlying index, which can lead to higher gains, but they also magnify losses in downturns. Similarly, inverse ETFs seek to profit from declines in the underlying index, meaning they can perform inversely to the market, but losses can accumulate quickly if the market moves against expectations. While these strategies will only be used in accordance with the investment objectives and strategies of the BetaPro Products, during certain market conditions they may accelerate the risk that an investment in shares of a BetaPro Product decreases in value. Investors should be aware of and understand their risk tolerance and capacity, and conduct their research before investing. An investment in any of the BetaPro Products is not intended as a complete investment program and is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment.

Certain statements may constitute a forward-looking statement, including those identified by the expression “expect” and similar expressions (including grammatical variations thereof). The forward-looking statements are not historical facts but reflect the author’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking statements. These forward-looking statements are made as of the date hereof and the authors do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.

This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase investment products (the “Global X Funds”) managed by Global X Investments Canada Inc. and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.

All comments, opinions and views expressed are generally based on information available as of the date of publication and should not be considered as advice to purchase or to sell mentioned securities. Before making any investment decision, please consult your investment advisor or advisors.

Global X Investments Canada Inc. (“Global X”) is a wholly owned subsidiary of Mirae Asset Global Investments Co., Ltd. (“Mirae Asset”), the Korea-based asset management entity of Mirae Asset Financial Group. Global X is a corporation existing under the laws of Canada and is the manager, investment manager and trustee of the Global X Funds.

© 2025 Global X Investments Canada Inc. All Rights Reserved.

Published February 24, 2025