RISR - RISR: An Alternative Investment Approach Using AI To Hedge Interest Rate Risk

2024-07-01 01:52:07 ET

Summary

• RISR is a new ETF offering a hedge against rising interest rates, providing a 7% yield from AAA-rated investments like US Treasuries and MBS.
• The fund is actively managed with a "quantamental" approach, combining quantitative and fundamental analysis with artificial intelligence to manage interest rate risk.
• RISR has outperformed other AAA-rated funds, offering a total return of over 60% since inception, and ranking highly in the nontraditional Bond sub-class.

The big question mark on many investors' minds this year has been what will happen with interest rates? When will the Fed decide to lower interest rates, and how will the timing of that decision impact my investments? Back in January, it was starting to look like rate cuts were imminent, and I even wrote an article cautioning against investing in a floating rate senior loan fund at the time, which turned out to be way too early. That article was about the Invesco Senior Income Trust ( VVR ), and I wrote, When Interest Rates Fall, Time To Bail . I rated VVR a Hold and since that article was published the fund has delivered a total return of 11.35%, nearly matching the S&P 500 change of 12.8%. I had posited at the time that when interest rates start to fall, those senior loans would pay less in interest payments, affecting the NII of the fund....

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