Quadratic Capital launches with fixed income volatility ETF

May 14th, 2019 | By | Category: Alternatives / Multi-Asset

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Quadratic Capital has introduced its debut ETF – the Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL US) – on NYSE Arca.

Nancy Davis, Founder and Chief Investment Officer, Quadratic Capital Management.

Nancy Davis, Founder and Chief Investment Officer, Quadratic Capital Management.

The actively managed fund seeks to hedge against an increase in inflation, and to profit from an increase in interest rate volatility and a steepening of the yield curve, whether that occurs via rising long-term interest rates or falling short term interest rates.

A steepening yield curve has historically been associated with large equity market declines

“I could not be more excited to launch IVOL in the current market environment with volatility at generational low levels and the flat nature of the yield curve,” said Nancy Davis, Founder and Chief Investment Officer, Quadratic Capital. “No other active or passive ETF provides its investors access to this market. This access is the key to IVOL’s many applications.”

Davis added, “IVOL is the next big step in the democratization of the markets. IVOL provides access to the largest OTC markets that have previously been largely unavailable to most advisors and the vast majority of investors.”

Davis will act as portfolio manager to the fund, harnessing her prior experience in OTC trading gained as Head of Credit, Derivatives and OTC Trading for Goldman Sachs’ proprietary trading group.

According to Quadratic, the fund may provide a potential hedge for numerous components of an investor’s portfolio. Apart from its benefits to fixed income exposure, the ETF may act as a tail hedge to equities and may also help hedge the risk of real estate asset depreciation brought on by rising long term interest rates.

The ETF comes with an expense ratio of 0.99%.

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