RPAR - RPAR: Heavy Allocation To Bonds May Cause Underperformance - Time To Exit

2024-06-12 04:07:41 ET

Summary

• RPAR ETF has delivered almost 7% returns since November, recouping some of its 2022 losses.
• Revisiting the RPAR ETF's design, I believe its heavy allocation to bonds will cause it to underperform in the coming years.
• Instead of the RPAR, investors may be able to achieve superior diversified returns using low-cost ETFs.

In my last update in November, I was structurally cautious about the RPAR Risk Parity ETF ( RPAR ), as I believed the fund may have been designed using correlations that bias the fund to hold too many fixed-income securities. However, given how oversold bonds were in November, I recommended investors hold on to the RPAR ETF and use upcoming rallies to reassess the fund....

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