As the Federal Reserve eyes a tighter monetary policy with higher rates ahead, exchange traded fund investors do not have to rely solely on tradition investment options to hedge against rising rate risks.
For example, the actively managed Reality Shares DIVS ETF (NYSEArca: DIVY) is a good alternative for a conservative fixed-income position in a changing market environment. DIVY tries to provide exposure to the growth rate of expected dividends and looks to deliver long-term capital appreciation rather than income and yield through options contracts and dividend swaps.
“Investors should look for better fixed-income alternatives in today’s rising rate environment. Short-term bond funds aren’t the only or best answer in today’s market, and equities have been showing signs of volatility… so where else can investors turn?” Eric Ervin, Founder & CEO of RealityShares, said in an email.
Related: A Contrarian ETF Bet on the US Dollar