September 9, 2021
A successful 8-month streak has put the market well above expectations, and there are reasons to still be optimistic, but the number of protection plays is growing on Walls Street. Whether it is a slowing economy, rising inflation, spreading delta variant, or tapering tantrum there are lots of reasons to stay protected which is why over $5 billion in inflows are headed to volatility-based protections. Funds like the Simplify Interest Rate Hedge ETF (PFIX) offer a direct hedge against a future of the interest rate market by placing a call on Treasury derivatives. Simplify’s Volatility Premium ETF (SVOL) can also generate returns from swings in the Cboe Volatility Index. This hedge is less specific than the PFIX but it gives investors a bigger safety net against unforeseen risks in the economy.
FINSUM + Magnifi: Consider fund alternatives that hedge against the equity market getting flipped upside down.
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