If you have a relatively short-term adjustable rate mortgage (ARM), you face risk from rising interest rates. If interest rates go up, stay up, and your mortgage payments go up correspondingly, you may have trouble making your mortgage payments. Two mutual funds (RRPIX and RYJUX) reduce your risk from rising rates.
The ProFunds Rising Rates Opp Inv (RRPIX) fund and the Rydex Juno Investor (RYJUX) fund both invest in futures contracts, options on futures contracts, options contracts, swaps, and forward contracts. Juno investor also shorts long-term Treasury bonds. The two have very similar performance.
Of the two, ProFunds is the newer. It began in May, 2002, and has about $300 million in assets. Rydex started in 1995, with $750 million in assets.
Investing in either one will require a chunk of change. ProFunds has a minimum investment of $15,000, with Rydex requiring $25,000.
Is investing in either of these practical for the little guy struggling to meet mortgage payments? Probably not. If you can't meet your mortgage payments and therefore went with an ARM in the first place, it's unlikely you have $15,000 lying around to invest. If possible, you could buy these funds on margin, thus getting more bang for your buck. Just know what you're doing.