Fixed income ETFs star in rising inflation scenario

ETF Express newsletter 11.03.22

This week we have an interview with Mark Carlson, Senior Investment Strategist at Northern Trust Asset Management’s FlexShares ETFs, with USD19 billion in assets, who celebrates the efficiency that ETFs have brought to fixed income trading, particularly in the latest scenario of rising interest rates and rising inflation. “For years and years, fixed income trading, excluding ETFs, has been over the counter so there hasn’t been a whole lot of transparency,” Carlson says. “But with ETFs and their disclosure of holdings, along with their ebbs and flows of redemptions and creations, you will find that ETF pricing during the day, especially in volatile periods such as currently with the situation in Ukraine, the funds may technically trade at a discount or premium to their NAV, bringing a level of transparency into the fixed income market.”

Also in the US, Bailey McCann did a round up of that growing sector of ETPs, the short & leveraged funds that are enjoying their day in the sun. In the shorting department, ARK Invest’s ARKK seems to be getting all the attention, with McCann reporting that Alternative asset manager AXS Investments has moved to get in on the ‘bet on ARK invest’ thesis with a January filing for an ETF that would give 2X exposure to ARKK. The firm has also filed for a suite of 18 ETFs each designed to replicate two times either the daily performance or daily inverse performance of single stocks. 

In Europe, I sat down, through the medium of Asset TV, with four funds from the HANetf platform who offer alternative routes to greening up a portfolio. Phil Beattie of Spark Change; Gabriela Herculano of iClima, Chris Versace of Tematica Research and Eric Strand of AuAg explained their alternative approaches to adding ESG into a portfolio.

You can watch the video here.

Beverly Chandler, managing editor, ETF Express

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Companies in this issue

Asset TV
ETC Group
Global X
Innovator Capital Management
Northern Trust Asset Management
Simplify Asset Management
Tematica Research


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