The first quarter has ended with huge inflows into Treasury bond ETFs. But the rush into higher-yielding bonds may not be over. Join us Monday on ETF Edge at 1:10 pm ET when our guests will be Chris Concannon, CEO of MarketAxess, an electronic trading platform that allows professionals to trade corporate bonds and other types of fixed-income instruments – along with Tom Lydon, Vice Chairman of VettaFi, and Alex Morris, President and CEO of F/m Investments. F/m Investments caught a wave last year with the introduction of the first single-bond ETFs – a suite of products that allowed investors to buy into on-the-run Treasury bills and notes, and he is now expanding that lineup.
Commodity ETFs pick up traction. With the road to reduced inflation looking more like a marathon than a sprint, commodities ETFs have been back on the menu as practical means of hedging. Simplify has just unveiled a new Commodities Strategy No K-1 ETF (HARD) – an actively managed ETF that offers exposure to hard commodities like crude oil, natural gas, copper, gold, corn, wheat and soybeans, by using long/short forecasting models to optimize positioning along futures curves. Simplify co-founder and CIO David Berns says, "With HARD, we've designed a means by which investors can access commodity exposure for both the short- and the long-term, with the potential to perform well during periods of inflation as well as in more typical market environments."
Built-in barriers against broad market declines. Early next week, Innovator Capital Management is launching a suite of four new Defined Outcome ETFs – the Innovator Premium Income Barrier ETFs – that seeks to offer fixed rates of high income with downside protection against drops in the S&P 500 over a one-year period. The new ETFs are being launched to meet increased demands for income-focused ETFs – and will be followed by an additional slate of Barrier ETFs later in the year. The aim is to mitigate many of the traditional risks tied to fixed income and offer potentially high returns in both up and down markets. The new ETFs will list on the Cboe BZX Exchange under the tickers APRD, APRH, APRJ and APRQ.
Bitcoin ETF bids continue. By now, the SEC has batted away numerous proposals for spot crypto ETFs – but more keep piling up. ETF issuer Volatility Shares is taking a stab at offering a digital currency ETF of its own via a levered bitcoin ETF product – the 2x Bitcoin Strategy ETF (BITX) – which would aim to double the performance of the S&P CME Bitcoin Futures Daily Roll Index on a daily basis. But given the SEC's ramped-up scrutiny of both crypto-related and levered products, the chances that such a fund would get approved are likely slim to none. The crypto community remains fixated on Grayscale Investments' efforts to convert its Bitcoin Trust (GBTC) into an ETF – and many agree the SEC may not want to green-light many crypto derivative products until that regulatory hurdle gets passed first.
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