The first ETF from alternatives fund operator AXS Investments is an active approach to benefiting from the soaring inflation that’s brought pause to a market that spent months running on pure optimism.
The AXS Astoria Inflation Sensitive ETF (PPI) debuted on the NYSE Arca Thursday, featuring an expense ratio of 0.71%. The ticker is a play on the producer price index, a leading indicator of inflation and the consumer price index.
The actively managed, fully transparent fund seeks to invest in multiple asset classes believed to benefit from sustained inflation, with no limit on location or market capitalization. However, the prospectus shows the fund intends to hold between 50 and 60 companies domiciled primarily in the U.S.
PPI can also invest in ETFs with exposure to commodities or fixed income assets like inflation-protected bonds.
John Davi, the chief investment officer of Astoria Portfolio Advisors, is the manager of the fund. He is an ETF industry veteran having spent 18 years with Merrill Lynch and Morgan Stanley before starting his own firm.
In an interview, he said PPI is the most complete approach to benefiting from inflation in an ETF today because it combines the gamut of stocks, fixed income and commodities rather than leaving investors to buy those exposures directly.
“It will make all the difference in the world to us and to other advisors that are going to struggle with what we think is a structural issue in the marketplace, which is rising inflation in the years to come,” he said.
AXS CEO Greg Bassuk said his firm is working on ways to roll out alternative investments to ETFs, in part by partnering with or acquiring mutual fund sponsors to bring new strategies into the wrapper. The firm is not looking to convert its own mutual funds into ETFs.
As of Wednesday, AXS has active filings for a bitcoin strategy ETF and a passive ESG ETF, according to SEC records. AXS also filed for an inverse bitcoin strategy ETF, but withdrew that in early November at the request of regulators.
Contact Dan Mika at [email protected], and follow him on Twitter