In response to the Federal Reserve’s recent pause in its 15-month rate hike cycle, FolioBeyond is slapping a fresh coat of paint on an exchange-traded fund that it launched 21 months ago to help investors ride the rising-rate wave.
Starting next Monday, the FolioBeyond Rising Rates ETF (RISR) will be renamed FolioBeyond Alternative Income and Interest Rate Hedge, using the same ticker symbol.
There's no indication that the fund’s investment strategy will change from investing primarily in government agency interest-only mortgage-backed securities.
At just $55.6 million, the ETF may be too small to hit most financial advisors' radar screens, but its performance during the Fed’s efforts to fight inflation by pushing rates to around 5.25% has been solid.
The fund gained 32% last year and is up 4.2% so far this year. The performance has been in stark contrast to the S&P 500 Index, which declined by 18.2% last year and is up 15.8% so far this year.
The thinking at FolioBeyond is that renaming the fund will separate the strategy from a Fed monetary policy that appears to be moving away from rising rates.
“Our decision to rename the fund reflects our belief that RISR has broad utility to investors seeking to manage risk in fixed income, equity and blended portfolios,” said Chief Executive Yung Lim.
“Many investors have successfully used RISR to take a position on the recent Federal Reserve tightening of financial conditions, but RISR is not a simple directional bet,” he added. “We believe the new name better aligns with our overall strategy for generating current income while managing risk in diverse investment strategies."
Todd Rosenbluth, director of research at VettaFi, described the name change as an effort to “tap into advisor sentiment.”
“With the Fed pausing rate hikes, advisors are likely to see income strategies as more attractive than a focus on limited interest-rate sensitivity,” he said. “However, advisors need to make sure any fund makes sense for their client objectives and go beyond the fund name.”
[More: Are Fed interest rates going up?]
Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.
Whichever path you go down, act now while you're still in control.
Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.
“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.
Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.
Streamline your outreach with Aidentified's AI-driven solutions
This season’s market volatility: Positioning for rate relief, income growth and the AI rebound
