Back to top

Image: Bigstock

Should Investors Diversify with Hedge Fund Style ETFs?

Read MoreHide Full Article

  • (1:45) - Simplify Interest Rate Hedge ETF: PFIX
  • (7:50) - Simplify Volatility Premium ETF: SVOL
  • (13:00) - Understanding Managed Futures: Simplify Managed Futures Strategy ETF (CTA - Free Report)
  • (19:30) - Simplify Market Neutral Equity Long/Short ETF: EQLS
  • (23:05) - Should Investors Be Using Single Stock ETFs In Their Portfolios?
  •                 Podcast@Zacks.com

 

In this episode of ETF Spotlight, I speak with Paul Kim, CEO of Simplify Asset Management. Simplify offers many innovative ETFs that help investors hedge against rising interest rates, generate risk-managed income and gain exposure to alternative strategies.

Stocks struggled in August as interest rates rose rapidly. The Simplify Interest Rate Hedge ETF (PFIX - Free Report) , which seeks to hedge against a sharp increase in long-term interest rates, gained more than 13% last month. The product also seeks benefit from market stress when fixed income volatility increases.

Some ETFs that use options to hedge against market volatility and pay juicy dividends have been quite popular with investors since last year. The JPMorgan Equity Premium Income ETF (JEPI - Free Report) is the largest actively managed ETF now.

The Simplify Volatility Premium ETF (SVOL - Free Report) currently has a distribution yield of 16% and has outperformed the S&P 500 index (SPY - Free Report) and all other covered call ETFs since its inception.

Managed futures strategies, also known as CTAs (commodity trading advisors), seek to replicate the trades of market trend-following quant hedge funds. These ETFs, including the Simplify Managed Futures Strategy ETF (CTA - Free Report) , shined last year, which was brutal for almost all major asset classes. When do these strategies work best?

The Simplify Volt RoboCar Disruption and Tech ETF (VCAR - Free Report) , is changing its strategy to benefit from Tesla's (TSLA - Free Report) big swings. According to Bloomberg, it will increase its exposure to the stock when on the upswing, and trim it when the momentum is downward.

We also discuss the role of alternative ETFs in a portfolio.

Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.

Published in