RISE Fund Description
The Sit Rising Rate ETF aims to capitalize on rising interest rates by taking short positions in futures contracts on 2-, 5- and 10-year Treasurys. The fund is actively managed.
RISE Factset Analytics Insight
RISE is designed to gain in value if interest rates increase. The fund uses futures contracts and options on Treasurys, making it a pure-play bet on rising rates for US investors. RISE explicitly aims for a duration of -10, meaning its value should gain 10% for an across-the-curve 1% increase in interest rates. The explicit duration target sets RISE apart from traditional inverse Treasury funds like TBF, which deliver equally potent—but variable—negative duration. As such, RISE may appeal as a precise hedging tool, as well as a tactical play on a rate hike.
The fund is actively managed but follows a stable strategy that takes short positions in futures on 2, 5, and 10 year Treasurys as well as listed options to hit its -10 duration target. While the fund’s manager—Sit Investments—is new to ETFs, it has delivered the strategy in other wrappers up until now. RISE also differs from traditional inverse ETFs in its commodity pool structure: investors receive a K-1 at tax time.
RISE isn’t cheap: It charges a significantly higher fee than peer ETFs, and like all inverse fixed income products, bears the negative carry of shorting yield. The new fund will likely cost more to trade than established rivals like TBF.
RISE Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of RISE. RISE is rated a N/A out of 5.