IVOL is a first-of-its-kind active fixed income ETF which is designed to profit from an increase in fixed income volatility and/or an increase in inflation expectations. It also is structured to profit from a steepening of the yield curve, whether that occurs via rising long-term interest rates or falling short term interest rates, which are historically associated with large equity market declines.
What makes IVOL unique is that it is long interest rate volatility via its access to the OTC fixed income options market. No other active or passive ETF has provided its investors access to this market before. This access is the key to IVOL’s many applications and allows it to potentially benefit from normalization of the yield curve while providing inflation-protection.
IVOL also provides inflation-protected income.
ABOUT THE IVOL ETF:
Expertise in options and volatility markets
IVOL is managed by Quadratic Capital Management, an innovative alternative asset management firm founded in 2013 by Nancy Davis. The firm’s expertise in the options and volatility markets allow us to construct portfolios that seek to mitigate the downside risk of the strategy while maintaining upside potential.
Attractive risk/reward profile
IVOL seeks to protect purchasing power, mitigate inflation risk, profit from an increase in volatility and a steepening of the yield curve, and provide inflation-protected income. At the same time, the fund looks to provide investors with access to the OTC interest rate options market – a market not previously available to individual investors – to provide structured solutions that offer an attractive risk/reward profile.
Allows for innovative strategies
We believe the OTC Swap/Options market offers an attractive combination of inefficiency and liquidity which allows for the creation of innovative strategies previously only available to sophisticated institutional investors. The use of options can provide the opportunity for products to be constructed with known downside risk and strong upside return potential.
THE FOLLOWING INVESTORS MAY BE INTERESTED IN IVOL
Fixed Income Investors
IVOL will be designed to provide a hedge against interest rate volatility, yield curve steepening and inflation
IVOL may act as a tail hedge as historically the curve has steepened in large equity sell-offs
Real Estate Investors
Rising long term interest rates tend to hurt real estate valuations