Inflation continues to be on the mind of investors and they’re shifting their strategies to mitigate any drastic change. There is also a looming mistrust of Fed policy with regard to interest rates.
Tags: inflation, Interest rates
Simplify Asset Management recently launched the Interest Rate Hedge ETF, which will seek to take advantage of what its backers see as a titanic shift in markets and is designed specifically to gain from rising longer-term Treasury yields.
The ETF, run by Harley Bassman, a former Merrill Lynch trader who developed a widely followed measure of bond-market volatility known as the MOVE index, will put half its cash in intermediate Treasurys and half in seven-year options referencing a 20-year interest rate of 4.25%. Those options should appreciate as long-term interest rates rise.Wall Street Journal