An Alternative ETF Play for Rising Interest Rate Risks

Many investors are looking for ways to hedge their fixed-income portfolios in a rising interest rate environment. Consequently, more are turning to alternative assets and exchange traded funds as a way to diminish portfolio volatility while still maintaining some upside potential.

ETF Trends publisher Tom Lydon spoke with Eric Ervin, Founder & CEO of RealityShares, at the Inside ETFs conference that ran Jan. 22-25, 2017 to talk income strategies in a rising interest rate environment.

“Everyone’s been searching for this alternative to fixed income, knowing that rates could someday rise but not knowing when they’re gong to rise,” Ervin said. “The end of last year was kind of the first awakening of that as interest rates started to rise. Some of those alternatives didn’t’ really offer an alternative. They were just other bonds.”

Consequently, more investors and advisors are re-evaluating their positions in the year ahead as we face rising inflation, pro-growth policies out of the Donald Trump administration and a more hawkish Federal Reserve that is seeking to normalize rates.