Securities currently held by CVY include common stocks, master limited partnerships (MLPs), real estate investment trusts (REITs), closed-end funds and preferred stocks.

Consequently, the multi-asset ETFs are now exposed to interest rate risks as many of their underlying holdings are sensitive to rate changes.

For instance, higher short-term rates increases funding costs for REITs, and higher long-term rates could raise book values for existing mortgage REITs. If rates rise, the cost of capital for MLPs would also increase, which would lower distributions on the asset and make the play less attractive.

Guggenheim Multi-Asset Income Index ETF

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.