RISR-FolioBeyond Rising Rates ETF

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superbobbyg
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RISR-FolioBeyond Rising Rates ETF

Post by superbobbyg »

Anyone look into this ETF as an inflation hedge?
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asset_chaos
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Re: RISR-FolioBeyond Rising Rates ETF

Post by asset_chaos »

The 1% expense ratio disqualifies it from consideration. On the other hand, the fund says its strategy is “quantamental”. So you know what you're getting for your 1%.-)
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Re: RISR-FolioBeyond Rising Rates ETF

Post by dru808 »

asset_chaos wrote: Fri Jan 14, 2022 4:02 pm The 1% expense ratio disqualifies it from consideration. On the other hand, the fund says its strategy is “quantamental”. So you know what you're getting for your 1%.-)
If it can quantum leap into the future, it may well be worth the 1% expense.
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wetgear
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Re: RISR-FolioBeyond Rising Rates ETF

Post by wetgear »

TSM and TISM index funds have proven to be great inflation hedges previously and are already part of the 3 fund portfolios strongly encouraged around here. They also cost ~ 1/100th in expenses of this ETF. Good enough for me to not have to look elsewhere for inflation hedges.
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superbobbyg
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Re: RISR-FolioBeyond Rising Rates ETF

Post by superbobbyg »

TISM?
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nisiprius
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Re: RISR-FolioBeyond Rising Rates ETF

Post by nisiprius »

superbobbyg wrote: Fri Jan 14, 2022 6:13 pmTISM?
TSM is sometimes a nickname for all of the share classes of the Vanguard Total Stock Market Index Fund

TISM is sometimes a nickname for all of the share classes of the Vanguard Total International Stock Index Fund
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superbobbyg
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Re: RISR-FolioBeyond Rising Rates ETF

Post by superbobbyg »

thanks
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nisiprius
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Re: RISR-FolioBeyond Rising Rates ETF

Post by nisiprius »

I'm personally not interested in it for these reasons:

a) It has a 1.01% expense ratio. (Whatever happened to the idea that ETFs were low cost?) Bonds don't make all that much money even under the most favorable of conditions. I never thought that I could afford to give up 1% per year of return in a bond fund years ago, and I sure don't think I can in 2022.

b) It's actively managed. I'm an indexer. Like all actively managed products it is something of a pig in a poke. It's going to be hard to figure out what to benchmark it against or whether it is fulfilling its mandate. It's going to be hard to compare it to similar funds from competitors.

c) It's tiny and it's new. It only has $3 million in assets. You'll have to ask the ETF mavens what's a "safe size," but $3 million is way below the safe size. It's so new that basic information, like the SEC yield, is shown as "TBD." The "median spread 30-day spread percentage" is 0.79%. Again, you'll have to ask the ETF mavens but I think that's staggeringly high, for VTI it's 0.01% but that's probably very low

e) In April of 2014, Bloomberg polled 68 economists on their forecasts for what the ten-year yield would do over the next six months. 68 out of 68 said they would go up. They went down. Despite all the cocksure statements, nobody knows what interest rates will do. It's not certain that they will rise.

f) One of the stated use cases for this ETF, according to the factsheet, is
Means of Expressing a Directional View for those who seek a vehicle designed to profit from rising rates
My purpose in holding bonds is not to match wits with other speculators or place bets on the direction of interest rates, it's to stabilize my portfolio. I have no views in interest rate directions. I don't seek to profit from rising rates.

Certainly, I hope to limit damage from rising rates, but my protection is my intention to hold my bond funds for periods of time similar to their duration. That should roughly immunize me against rising rates.

g) Nothing about this ETF positions it as protection against inflation. My protection against inflation is investing in inflation-linked bonds, which this ETF doesn't do. Almost ⅔ of our marketable bond holdings are TIPS, and in addition we have a meaningful holding of series I savings bonds.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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