20-yr US Treasuries (TMF)

Key Updates

TMF declined 3.21% to $34.81 since the March 20 report, extending the selloff to eight consecutive sessions and reaching the lowest level since tracking began. The leveraged ETF has now fallen 14.28% over the past month and 6.73% year-to-date, despite February's strong Treasury rally that delivered 4% gains for long-dated securities. The recent weakness sharply contradicts the safe-haven narrative from late February, when Treasuries completed their strongest monthly performance in a year amid global market uncertainties. This divergence suggests either a fundamental shift in market dynamics or a temporary reversal of the flight-to-quality trade.

Current Trend

TMF remains in a pronounced downtrend across all timeframes, with losses accelerating in March. The ETF has declined 6.73% year-to-date and 14.28% over the past month, erasing all gains from February's 4% rally in long-dated Treasuries. The 3.21% decline since March 20 marks the eighth consecutive session of losses, pushing the price to $34.81—a new multi-month low. Short-term momentum remains decidedly bearish, with 1-day (-1.72%) and 5-day (-1.61%) declines indicating sustained selling pressure. The 6-month decline of 12.05% demonstrates structural weakness in the long-duration Treasury space, despite episodic safe-haven rallies.

Investment Thesis

The investment thesis for TMF centers on positioning for duration exposure during periods of economic uncertainty, market volatility, or expectations of falling interest rates. As a 3x leveraged ETF tracking 20-year Treasuries, TMF provides amplified returns when long-dated government bonds rally. The thesis relies on Treasuries maintaining their status as the premier safe-haven asset during turbulent market conditions, as demonstrated during February's 4% rally when investors fled to quality amid AI disruption fears, geopolitical tensions, and private credit market stress. However, the thesis requires sustained dovish monetary policy expectations or genuine risk-off sentiment to overcome the headwinds from elevated yields and duration risk inherent in 20-year securities.

Thesis Status

The investment thesis has deteriorated significantly since the March 20 report. Despite compelling safe-haven narratives in late February—when Treasuries delivered their strongest monthly performance in a year with long-dated securities gaining 4%—TMF has reversed sharply, falling 14.28% over the past month. This suggests the February rally was a temporary flight-to-quality episode rather than a sustainable trend reversal. The 3.21% decline since March 20 extends the selloff to eight consecutive sessions, indicating either a shift away from duration positioning, rising yield expectations, or diminished safe-haven demand. The thesis remains challenged by structural headwinds that have driven the 6.73% year-to-date decline, with the recent price action contradicting the defensive positioning rationale articulated by financial experts from JPMorgan Asset Management and Société Générale Americas in late February.

Key Drivers

The primary driver remains the reversal of February's safe-haven rally, when US Treasury bonds completed their strongest monthly performance in a year amid global market uncertainties. Despite renewed investor demand for Treasuries demonstrating their continued status as the primary safe-haven asset during periods of market volatility, TMF has declined 14.28% over the past month, suggesting the defensive positioning has unwound. The February rally was driven by multiple concerns including AI disruption fears, rising geopolitical tensions, and stress signals in private credit markets, yet these catalysts have failed to provide sustained support. The 3x leverage magnifies the impact of yield movements, with the 3.21% decline since March 20 indicating either rising long-term yields, reduced safe-haven demand, or both. The disconnect between the positive safe-haven narrative and price action suggests market participants are either anticipating higher-for-longer rates or rotating away from duration exposure despite ongoing turbulence.

Technical Analysis

TMF exhibits severely deteriorated technical conditions, trading at $34.81 after an 8-session losing streak that has pushed the ETF to new multi-month lows. The price has broken below all previous support levels identified in prior reports, with no apparent floor established. The 1-month decline of 14.28% represents a near-vertical selloff that has accelerated rather than stabilized, with recent sessions showing 1-day (-1.72%) and 5-day (-1.61%) losses indicating persistent selling pressure. The 6-month chart reveals a 12.05% decline with brief counter-trend rallies proving unsustainable, most notably the February spike that was completely erased within weeks. The year-to-date performance of -6.73% masks the severity of recent weakness, as March losses have accelerated dramatically. No technical support levels are apparent at current prices, and momentum indicators across all timeframes remain bearish. The failure to hold February's gains represents a significant technical breakdown, suggesting further downside risk until selling pressure exhausts or fundamental catalysts emerge.

Bull Case

• Treasuries delivered their strongest monthly performance in a year during February, with long-dated securities gaining 4%, demonstrating the asset class can generate substantial returns during risk-off periods and validating the safe-haven thesis for duration positioning.
• Renewed investor demand for Treasuries demonstrates their continued status as the primary safe-haven asset during periods of market volatility, as confirmed by financial experts from JPMorgan Asset Management and Société Générale Americas, suggesting future turbulence could reignite defensive positioning.
• Multiple concerns including AI disruption fears, rising geopolitical tensions, and stress signals in private credit markets drove February's rally, and these structural uncertainties remain unresolved, potentially triggering renewed safe-haven flows.
• The 14.28% decline over the past month has pushed TMF to oversold levels, creating potential for mean reversion or tactical bounce if any catalyst emerges to shift sentiment back toward duration assets or defensive positioning.
• The S&P 500 headed for its biggest monthly decline since April in February, and continued equity market weakness could reinforce the traditional negative correlation between stocks and Treasuries, driving renewed demand for long-duration government bonds.

Bear Case

• TMF has declined 14.28% over the past month despite compelling safe-haven narratives, indicating the February rally was a temporary episode rather than a sustainable trend and suggesting structural headwinds outweigh episodic defensive demand.
• The 8-session losing streak pushing TMF to $34.81 represents technical breakdown below all previous support levels, with accelerating rather than stabilizing losses indicating no buyer support at current levels and risk of further capitulation.
• The complete reversal of February's 4% gain in long-dated Treasuries within weeks demonstrates the fragility of duration positioning and suggests market participants are unwilling to sustain exposure to 20-year maturities even during periods of uncertainty.
• The 6.73% year-to-date decline and 12.05% 6-month loss reveal persistent structural weakness across all timeframes, with brief rallies proving unsustainable and indicating either rising long-term yield expectations or systematic rotation away from duration exposure.
• The 3x leverage structure magnifies downside risk, with the 3.21% decline since March 20 accelerating the multi-week selloff and suggesting continued vulnerability to any further yield increases or reduced safe-haven demand in an environment where previous defensive catalysts have failed to provide sustained support.