IVOL - IVOL: Great Pitch Poor Delivery

• Income investors are growing increasingly concerned about the risk of higher inflation and rising interest rates that would do serious damage to traditional income portfolio holdings.
• We evaluate IVOL - a fund that attempts to mitigate the rise in inflation and interest rates.
• We find that the impact of the fund's yield curve steepener options are mostly offset by its long-duration TIPS holdings, greatly diminishing the fund's ability to deliver its mandate.
• In addition, the fund's negative yield makes it a challenging hold for income portfolios.
• Investors may be better served by keeping it simple and tilting to floating-rate or short-duration assets to mitigate the potential impact of higher interest rates.

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