Yesterday, Global X debuted two actively managed ETFs that provide hedging strategies to investors. The Global X Interest Rate Hedge ETF (IRHG) and the Global X Interest Rate Volatility & Inflation Hedge ETF (IRVH) both implement options strategies to achieve their objectives.
The two funds each come with expense ratios of 0.45% and list on the NYSE Arca.
"Options-based strategies can help to ameliorate the difficult market conditions that investors face in inflationary and rising rate environments. Compared to traditional equity market opportunities, interest rate strategies using options can provide greater diversification and potentially stronger risk-adjusted returns in a rising rate environment," said Global X’s Director of Research Rohan Reddy.
IRHG uses interest rate payer “swaptions” to create a similar exposure to owning long-dated put options on longer-term U.S. Treasury bonds, with the goal of benefiting from interest rate increases, a press release says.
Meanwhile, IRVH holds a combination of U.S. Treasury inflation-protected securities and options on interest rates to hedge against interest rate increases and protect against inflation while gaining income.
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