The Leverage Shares 5x Long 20+ Year Treasury Bond ETP (TLT5) seeks to track the 5x Long 20+ Year Treasury Bond Investment Strategy, which is designed to provide 5x the daily return of iShares 20+ Year Treasury Bond ETF (TLT), adjusted to reflect the fees and costs of maintaining a leveraged position in the stock.

The iShares 20+ Year Treasury Bond ETF offers insights into the broader bond market and is influenced by changes in long-term interest rates.

As interest rates rise the yield of bonds generally increase, and vice versa. Yield is a term that relates to the return on the capital invested in a bond. Price and yield have inverse relationship, meaning that: a surge in bond yields would lead to a fall in bond prices, and a dip in bond yields, would lead to a rise in bond prices.

For example, if TLT rises by 1% over a day, then TLT5 will rise by 5%. If TLT falls by 1% over a day, then TLT5 will fall by 5%.

Bond ETFs offer many advantages over single bonds. With an ETF, investors can own a large number of bonds in an index at a purchase price significantly less than what it would be to invest in each issue individually. Using bond ETPs investors invest a fraction of the price of the ETFs, while gaining the same exposure, thanks to the leverage factor applied to the ETPs. Therefore, bond ETPs provide investors with access to institutional investments at a retail price.

Source: TradingView

What investors should consider when deciding which bond ETP to buy:

· Investors of the view that U.S. interest rates have peaked and anticipate the Federal Reserve would start cutting interest rates in early 2024 may consider TLT5 to gain magnified exposure to rising bond prices (as yields decline, bond prices rise).

· Investors of the view that the Federal Reserve is not done with its fight against inflation and anticipate another rate hike in the coming months may consider TL5S to gain magnified exposure to falling bond prices (as yields rise, bond prices decline).