Some investors are preparing for wild swings in financial markets, worried that inflation, and the Federal Reserve’s pledge to let it rise, will lead to a more volatile world.
The reason: The economic policies aiming to create inflation now are the opposite of the ones that kept markets relatively stable for decades.
Simplify Asset Management recently launched the Interest Rate Hedge ETF, which will seek to take advantage of what its backers see as a titanic shift in markets and is designed specifically to gain from rising longer-term Treasury yields.
That is high compared with current seven-year Treasury yields of about 1.25%.
But at higher levels of rates, between 3.5% and 5%, stock and bond prices become more volatile and move in sync—so this ETF is meant to protect investors from that outcome too, Mr. Bassman said.
Harley Bassman, Merrill Lynch, Bassman