Each week, ETF Trends publisher Tom Lydon sits down for “ETF of the Week” for MarketWatch on Chuck Jaffe’s MoneyLife Show where he highlights big movers and losers among exchange traded funds.
This week, Lydon looked at the ProShares Investment Grade Interest Rate Hedged ETF (IGHG), a Bond ETF strategy that helps negate risks in a rising rate environment.
The Federal Reserve is expected to hike rates three more times this year.
IGHG holds short positions in interest rate swaps to provide about a 0 year effective duration. IGHG has a 0.19 year duration, so a 1% rise in rates would mean a 0.19% decline in its price, roughly.