NEW YORK, Oct. 04, 2021 (GLOBE NEWSWIRE) — FolioBeyond, in collaboration with Tidal ETF Services, announces the launch of the Folio Beyond Rising Rates ETF (ticker: RISR), the Fund seeks to provide current income in a stable rate environment and protect against rising interest rates. We believe both institutions and retail investors can utilize RISR as a unique hedge against rising interest rates in what is a potentially increasing inflationary economic environment that ultimately must be dealt with by every investor.
“The global pandemic has extended a long-term macro environment where interest rates are extremely low and appear asymmetrically skewed toward higher rates in the future,” said Yung Lim, CEO of FolioBeyond. “Most rising rate protection strategies are expensive and exhibit negative carry. RISR employs a positive carry strategy that looks to benefit from secularly higher interest rates and could attract significant interest from a broad range of institutions and retail investors.” RISR is uniquely focused on these features and offers a much-needed risk in the ETF space.
“Investors including RIAs, endowments, insurance companies, family offices, asset managers, mortgage originators, pension funds, and individuals will be able to utilize this ETF,” said Dean Smith, Chief Strategist, and portfolio manager for RISR.
“It has been our honor to partner with the team at FolioBeyond on this timely, relevant strategy,” said Eric Falkeis, CEO of Tidal ETF Services. “One of our main objectives as a multi-manager ETF platform is to source, structure and launch products we believe in and that will help enhance our portfolio. We believe RISR fits the bill.”
Maintaining a target of approximately negative 10 years in duration*, RISR can also be implemented in FolioBeyond’s multi-factor optimization model, which provides overall guidance on asset allocation across 24 fixed income sub-sectors.
FolioBeyond is an asset management firm that utilizes advanced algorithms as well as artificial intelligence, (“AI”) and machine learning tools designed to build diversified portfolios, manage risk, deliver optimal returns, and provide customized asset management solutions for both fixed income and equity portfolios.
About Tidal ETF Services
Formed by ETF industry pioneers and thought leaders, Tidal sets out to disrupt the way ETFs have historically been developed, launched, marketed and sold. With a transparent, partnership approach, Tidal offers a comprehensive suite of services, proprietary tools, and methodologies designed to bring lasting ideas to market. As advocates for ETF innovation, Tidal helps RIAs, institutions and investment firms launch, manage and grow innovative ETFs that clients demand. For more information, visit tidaletfservices.com.
Investing involves risk, including the possible loss of principal.
The value of interest-only mortgage-backed securities “MBS IOs” is more volatile than other types of mortgage-related securities. They are very sensitive not only to declining interest rates, but also to the rate of prepayments. MBS IOs involve the risk that borrowers may default on their mortgage obligations or the guarantees underlying the mortgage-backed securities will default or otherwise fail and that, during periods of falling interest rates, mortgage-backed securities will be called or prepaid, which may result in the Fund having to reinvest proceeds in other investments at a lower interest rate.
The Fund’s derivative investments have risks, including the imperfect correlation between the value of such instruments and the underlying assets or index; the loss of principal, including the potential loss of amounts greater than the initial amount invested in the derivative instrument. The value of the Fund’s investments in fixed income securities (not including MBS IOs) will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned indirectly by the Fund.
The Fund is non-diversified and may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. As a result, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a smaller number of issuers which may increase the Fund’s volatility and have a greater impact on its performance. The Fund is new with no operating history or track record for an investor to base their investment decision upon.
This release is being made available for informational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction.
Positive carry is a strategy that involves borrowing money in order to invest it to make a profit on the difference between the interest paid and the interest earned.
Negative carry is a condition in which the cost of holding an investment or security exceeds the income earned while holding it.
*Duration is a measure of the relationship between interest rates and price for a fixed income security. Positive duration refers to a relationship whereby prices decline as interest rates rise, while negative duration refers to a relationship whereby prices increase as interest rates rise.
The Funds’ investment objectives, risks, charges and expenses must be considered carefully before investing. For the summary and/or statutory prospectuses containing this and other important information for the Funds please call 877-358-0096. Read the prospectus carefully before investing.
Funds are distributed by Foreside Fund Services, LLC.
Copyright © 2021 FolioBeyond, LLC. All rights reserved.