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Rising Rate & Inflation-Beating ETFs at One-Month Highs
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Though sky-high U.S. inflation has cooled a bit lately, the Fed remains steadfast in taming it. Federal Reserve Bank of Minneapolis President Neel Kashkari recently said that U.S. inflation is very high and the central bank will leave no stone unturned to bring it back under control, per Bloomberg, as quoted on Yahoo Finance.
“By many, many measures we are at maximum employment and we are at very high inflation. So this is a completely unbalanced situation, which means to me it’s very clear: We need to tighten monetary policy to bring things into balance,” he said at a gathering of the Wharton Club of Minnesota in Minneapolis, per Bloomberg.
“When inflation is 8% or 9%, we run the risk of unanchoring inflation expectations and leading to very bad outcomes that would cause us to have to be very aggressive -- Volcker-esque -- to then re-anchor them,” he said, per the source.
The Fed hiked rates by 75 basis points at its last two meetings and policy makers have said the same or at least 50 bps again could be in the cards next month. In any case, the greenback has gaining fast. A stronger U.S. currency could help lower inflation by bringing down the cost of imported goods.
No wonder, ETFs that give protection against rising rates and rising inflation have been surging and are currently hovering around a one-month high.
This ETF is active and does not track a benchmark. The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income. The fund charges 50 bps in fees. The fund charges 50 bps in fees.
Advocate Rising Rate Hedge ETF
This ETF is active and does not track a benchmark. The Advocate Rising Rate Hedge ETF is a multi-asset ETF that seeks to generate capital appreciation during periods of rising long term interest rates, specifically interest rates with maturities of five years or longer. The fund charges 85 bps in fees.
The underlying Quantix Inflation Index is composed of futures contracts on physical commodities and it considers relative inflation sensitivity of a commodity and the relative cost of holding a rolling futures position in the commodity. The fund charges 68 bps in fees.
The underlying FTSE 30-Year TIPS (Treasury Rate-Hedged) Index tracks the performance of long positions in the most recently issued 30-year TIPS and duration-adjusted short positions in U.S. Treasury bonds of, in aggregate, approximate equivalent duration dollars to the TIPS. The fund charges 30 bps in fees and yields 2.41% annually.
The Ionic Inflation Protection ETF is an actively managed exchange-traded fund that seeks to generate positive returns during periods of elevated and rising inflation and inflation expectations as well as during periods of increasing interest rates and fixed income volatility. The fund charges 70 bps in fees.
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Rising Rate & Inflation-Beating ETFs at One-Month Highs
Though sky-high U.S. inflation has cooled a bit lately, the Fed remains steadfast in taming it. Federal Reserve Bank of Minneapolis President Neel Kashkari recently said that U.S. inflation is very high and the central bank will leave no stone unturned to bring it back under control, per Bloomberg, as quoted on Yahoo Finance.
“By many, many measures we are at maximum employment and we are at very high inflation. So this is a completely unbalanced situation, which means to me it’s very clear: We need to tighten monetary policy to bring things into balance,” he said at a gathering of the Wharton Club of Minnesota in Minneapolis, per Bloomberg.
“When inflation is 8% or 9%, we run the risk of unanchoring inflation expectations and leading to very bad outcomes that would cause us to have to be very aggressive -- Volcker-esque -- to then re-anchor them,” he said, per the source.
The Fed hiked rates by 75 basis points at its last two meetings and policy makers have said the same or at least 50 bps again could be in the cards next month. In any case, the greenback has gaining fast. A stronger U.S. currency could help lower inflation by bringing down the cost of imported goods.
No wonder, ETFs that give protection against rising rates and rising inflation have been surging and are currently hovering around a one-month high.
ETFs in Focus
Simplify Interest Rate Hedge ETF (PFIX - Free Report)
This ETF is active and does not track a benchmark. The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income. The fund charges 50 bps in fees. The fund charges 50 bps in fees.
Advocate Rising Rate Hedge ETF
This ETF is active and does not track a benchmark. The Advocate Rising Rate Hedge ETF is a multi-asset ETF that seeks to generate capital appreciation during periods of rising long term interest rates, specifically interest rates with maturities of five years or longer. The fund charges 85 bps in fees.
Harbor All-Weather Inflation Focus ETF (HGER - Free Report)
The underlying Quantix Inflation Index is composed of futures contracts on physical commodities and it considers relative inflation sensitivity of a commodity and the relative cost of holding a rolling futures position in the commodity. The fund charges 68 bps in fees.
Inflation Expectations ETF (RINF - Free Report)
The underlying FTSE 30-Year TIPS (Treasury Rate-Hedged) Index tracks the performance of long positions in the most recently issued 30-year TIPS and duration-adjusted short positions in U.S. Treasury bonds of, in aggregate, approximate equivalent duration dollars to the TIPS. The fund charges 30 bps in fees and yields 2.41% annually.
Ionic Inflation Protection ETF (CPII - Free Report)
The Ionic Inflation Protection ETF is an actively managed exchange-traded fund that seeks to generate positive returns during periods of elevated and rising inflation and inflation expectations as well as during periods of increasing interest rates and fixed income volatility. The fund charges 70 bps in fees.