×

On the 6th day of Fedmas, Janet Yellen sent to me...

Janet Yellen as Santa
H. Armstrong Roberts | ClassicStock | Getty Images; Getty Images

During each of the 12 trading days before the Federal Reserve's interest rate decision on Dec. 16, CNBC Pro is highlighting a single strategy that should work if the central bank hikes rates, as many on Wall Street expect. We found these trades using Kensho, a powerful tool used by hedge funds to analyze historical market data.

In the holiday spirit, we will call this series the "Twelve Days of Fedmas." Monday marked the sixth day so we've added another line, "Six ETFs-a-leveraged."

On the sixth day of Fedmas,

Janet Yellen sent to me:

Six ETFs-a-leveraged...

FIV-V-V-E GOLD-D-D-D M-A-N Sachs.

Four Lincoln Nationals ...

Three ETNs ...

Two General Motors ...

And a pair trade in Curr-en-cies!

Atlanta Fed President Dennis Lockhart said Monday the economy is ready for the central bank to raise rates next week, comments that traders are taking as a clear sign it will actually do it this time. If the Fed move sparks an increase in long-term rates, there are 12 trades and more for investors, if history is any guide.

CNBC Pro ran the numbers on Kensho and found that certain leveraged exchange-traded funds do perform well under a scenario of rising long-term interest rates for U.S. markets. We looked at all the one-month periods of significant moves higher in rates over the last decade. Here are the ETFs that did the best...

Contact Investing

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    Get these newsletters delivered to your inbox, and more info about about our products and service. Privacy Policy.