FINSUM + Magnifi: ETFs that Hedge Higher Volatility

Magnifi in Action: Discover "Active ETFs"

Click on any fund in the chart below to dig deeper.

June 28, 2021

Volatility has flown below the radar for most of 2021. Stock prices are rising and the long-lasting inverse relationship between volatility and stock prices is holding strong. However, major events are looming such as inflation, ending stimulus, and Fed tightening. Now might be the time to unearth some volatility strategies. The first strategy is to buy low-volatility ETF’s like the iShares MSCI USA Min Vol Factor ETF (USMV). Rather than hedge directly against the VIX, this ETF separates factors of volatility in the S&P 500 with the lowest factor rating. 

The other strategy is to directly hedge against the VIX. ProShares VIX Short Term Futures ETF (VIXY) directly hedges volatility through short-term futures contracts on the VIX. Finally, you can hedge losses through direct inverse ETFs like the ProShares Short QQQ ETF or Direxion Daily S&P 500 Bear 1X Shares ETF.

(New York)

FINSUM + Magnifi: If there is market turmoil, bonds won’t provide the countercyclical hedge they normally do if it's caused by inflation. Volatility strategies can be a better hedge for your portfolio.

Other news today: Buybacks Are Back for Big Banks and Large Caps Are the Income Investor’s Low Yield Response
 


New call-to-action

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. As of June 2021, 380,000+ users with $534+ Billion in Assets Under Influence, have used Magnifi over 3,800,000 times. Try it for yourself today.

 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide brokerage or custody services.]