For investors seeking momentum, ProShares High Yield—Interest Rate Hedged ETF (HYHG Quick QuoteHYHG - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 22.9% from its 52-week low price of $56.20/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

HYHG in Focus    

The fund looks to track high yield bonds and has an interest rate hedge built into its strategy as it takes a duration-matched short position in U.S. Treasury futures. The fund charges 50 bps in fees (see all High-Yield/Junk Bond ETFs here).

Why the Move?

As widely expected, the Fed raised benchmark interest rates by a modest 25 bps to the 0.50–0.75% band. The Fed expressed its confidence in the U.S. economy and forecast three rate hikes in 2017, up from two guided in September.

As a result, treasury yields were on an uphill ride, hurting bond prices. The yield on the benchmark 10-year Treasury note was 2.54% on December 14. This product offers a pretty high yield of 5.39%, indicating that this could be a safer bond and yield play for investors anxious about rising rates.

More Gains Ahead?

It seems that HYHG might continue with its strength given a positive weighted alpha of 13.10. Since a positive weighted alpha hints at more gains, there is definitely still some promise for investors who want to ride this surging ETF a little further.

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