What is the INFL ETF supposed to do?

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Stork
Posts: 118
Joined: Wed Feb 17, 2021 10:44 am
Location: EU

What is the INFL ETF supposed to do?

Post by Stork »

Lyxor EUR 2-10Y Inflation Expectations UCITS ETF - Acc

It is long in inflation linked and short in nominal bonds, matching durations.

It says tracking the "Markit iBoxx EUR Breakeven Euro-Inflation France & Germany Index", but that does not make me much wiser. The KIID may be true but not really enlightening.

Based on recent performance, it is doing well when inflation goes up. Is it "just" for unexpected inflation?
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vineviz
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Joined: Tue May 15, 2018 1:55 pm
Location: Baltimore, MD

Re: What is the INFL ETF supposed to do?

Post by vineviz »

Stork wrote: Sun Nov 13, 2022 1:55 pm Lyxor EUR 2-10Y Inflation Expectations UCITS ETF - Acc

It is long in inflation linked and short in nominal bonds, matching durations.

It says tracking the "Markit iBoxx EUR Breakeven Euro-Inflation France & Germany Index", but that does not make me much wiser. The KIID may be true but not really enlightening.

Based on recent performance, it is doing well when inflation goes up. Is it "just" for unexpected inflation?
A fund like this is designed to perform well when inflation is higher than expected, and is primarily an instrument that is designed to be traded (i.e. express a short-term view of markets) rather than function as a long-term core holding for an investor.

Short story: it's probably not meant for you. Avoid.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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