Global X has changed the ticker symbol for its Global X Interest Rate Hedge ETF (NYSE Arca: IRHG) from IRHG to (RATE ). The fund still trades on the New York Stock Exchange.
According to Global X, RATE is an actively managed ETF that seeks to provide a hedge against sharp increases in long-term U.S. interest rates and is expected to benefit during periods of market stress when interest rate volatility is elevated.
The fund seeks to achieve its investment objective primarily by investing in long-interest rate swap options and long positions in short-term U.S. Treasury securities. The latter is mainly used for cash management purposes. RATE may invest in U.S. Treasury bills directly or through other ETFs.
Rohan Reddy, director of research at Global X, said in a news release when the fund was launched in July: “Options-based strategies can help to ameliorate the difficult market conditions that investors face in inflationary and rising rate environments. Compared to traditional equity market opportunities, interest rate strategies using options can provide greater diversification and potentially stronger risk-adjusted returns in a rising rate environment."
By holding options designed to benefit from rising long-term interest rates, RATE provides access to an efficient fixed income hedging strategy designed to offset interest rate risk in a portfolio.
“Advisors continue to cite to VettaFi the impact of rising rates on their fixed income exposure as a key concern,” said Todd Rosenbluth, head of research at VettaFi. “They continue to seek out tools to help them navigate the bond market and reduce the downside.”
RATE has an expense ratio of 0.45%.
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