An Inverse Fund That Rises When U.S. Fixed-Rate Bonds Fall

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.
[happy investor up arrows]

The Direxion Daily Total Bond Market Bear 1X Shares (SAGG) is an inverse exchange-traded fund (ETF) that is intended to rise when an index of investment grade, U.S. fixed-rate bonds falls.

In market conditions in which the bond market is dropping, this fund is designed to have positive returns of similar magnitude. SAGG will allow investors to more directly bet against bonds than ideologically correlated investments such as stocks. 

However, I do not recommend holding shares of this fund for the long term. This fund has not performed well in the most recent 12 months. In fact, it is down nearly 6%, as bonds have risen in the same period. 

Shorter time periods than the past 12 months do not look much better for SAGG, except perhaps for the last month, when it rose slightly. The expense ratio of 0.49% makes this fund a little on the expensive side to hold, much like many inverse ETFs. It does, however, pay a 1.84% dividend.

The fund’s assets under management total nearly $3 million. This puts it below my recommended threshold for investment, but the fund’s strategy is nonetheless interesting. The ticker symbol seems to refer to AGG, the large and very liquid iShares Core U.S. Aggregate Bond ETF. You can think of SAGG as a way to “short AGG,” since the two funds have opposite strategies based on the same index.

Chart Courtesy of

This fund is not very liquid, so it may be advisable to use limit orders to trade it. The average spread currently sits at 0.44%.

If you think the bond market in the United States is headed for pain sometime soon, Direxion Daily Total Bond Market Bear 1X Shares (SAGG) may be an investment worth investigating.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Exclusive  Make Every Day Someone’s Birthday
share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor