5 ETFs Surge As S&P 500 Slips to Bear Market

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The S&P 500 slipped into the bear market to start the new week on renewed inflation concerns that could push the economy into a recession. The benchmark tumbled as much as 3.9% on Jun 13, putting it 21.9% below its all-time high set in January and ending the bull market that began at the depths of the COVID crash in March 2020 (read: Why You Should Tap Inverse ETFs This Week).

While the U.S. stocks saw feeble trading, a few corners of the ETF world excelled. Some of these include iPath Series B S&P 500 VIX Short-Term Futures ETN VXX, Simplify Interest Rate Hedge ETF PFIX, Cambria Tail Risk ETF TAIL, AGFiQ US Market Neutral Anti-Beta Fund BTAL and Volt Crypto Industry Revolution & Tech ETF BTCR.

After cooling somewhat in April, U.S. consumer prices accelerated at the fastest rate in May since 1981, as Americans grapple with a surge in the cost of gas, food and shelter. The consumer price index (CPI) jumped 8.6% year over year to a fresh 40-year high, from an 8.3% annual increase recorded in April.

The data has put pressure on Fed to extend an aggressive series of interest rate hikes and has added to political problems for the White House and Democrats. In the Federal Open Market Committee meeting slated to start today, the central bank is expected to hike rates by 50 bps to a range of 1.25-1.5%. But with the latest inflation data, the Fed might shock markets with a larger increase of 75 basis points.

The massive decline followed last week’s slump when the major indices posted their biggest weekly declines since late January.

iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) – Up 10.8%

The VIX is often known as the fear index as it surges when investors are skittish about the market’s current direction. Obviously, this is the case right now and the ETNs and ETFs tracking this benchmark are poised to gain on recession fears. iPath Series B S&P 500 VIX Short-Term Futures ETN is a popular option providing exposure to volatility that sees a truly impressive average volume of about 4 million shares a day. The note has amassed $571.1 million in AUM and charges 89 bps in fees per year.

iPath Series B S&P 500 VIX Short-Term Futures ETN focuses on the S&P 500 VIX Short-Term Futures Index, which reflects implied volatility in the S&P 500 Index at various points along the volatility forward curve. It provides investors with exposure to a daily rolling long position in the first and second months of VIX futures contracts.

Simplify Interest Rate Hedge ETF (PFIX) – Up 7.8%

Simplify Interest Rate Hedge ETF seeks to provide a hedge against a sharp increase in long-term interest rates and benefit from market stress when fixed-income volatility increases, while providing the potential for income. It buys put options on longer-term Treasury bonds to offer “the most liquid and the most cost-efficient way of getting interest rate protection.” Simplify Interest Rate Hedge ETF is the first ETF providing a simple, direct and transparent interest rate hedge (read: 5 ETFs to Protect Your Portfolio Amid Market Sell-Off).

PFIX has accumulated $294.4 million in its asset base since its debut a year ago and trades in an average daily volume of 224,000 shares. It charges 50 bps in annual fees.

Cambria Tail Risk ETF (TAIL) – Up 2.8%

Cambria Tail Risk ETF seeks to mitigate significant downside market risk as it invests in a portfolio of “out of the money” put options purchased on the U.S. stock market. The TAIL strategy offers the potential advantage of buying more puts when volatility is low and fewer puts when volatility is high. While a portion of the fund’s assets will be invested in the basket of long put option premiums, the majority of fund assets will be invested in intermediate-term U.S. Treasuries.

Cambria Tail Risk ETF has amassed $460.6 million in its asset base and charges 59 bps in annual fees from investors. It trades in a volume of 524,000 shares a day on average.

AGFiQ US Market Neutral Anti-Beta Fund (BTAL) – Up 2.6%

AGFiQ US Market Neutral Anti-Beta Fund has the potential to generate positive returns regardless of the direction of the stock market as long as low-beta stocks outperform high-beta stocks. It invests primarily in long positions in low-beta U.S. equities and short positions in high-beta U.S. equities on a dollar-neutral basis within sectors.

AGFiQ US Market Neutral Anti-Beta Fund has AUM of $153 million and an expense ratio of 2.53%. It trades in an average daily volume of 176,000 shares (read: S&P 500’s Worst Week Since January: Best ETF Areas).

Volt Crypto Industry Revolution & Tech ETF (BTCR) – Up 2.6%

Volt Crypto Industry Revolution & Tech ETF is the first ETF offering exposure to Bitcoin companies and its supporting infrastructure. It employs a call options overlay designed to boost performance in extreme run-ups of companies with high bitcoin-correlation. BTCR is actively managed and looks to indicators such as the stock-to-flow model to adjust its level of Bitcoin-related investments.

Volt Crypto Industry Revolution & Tech ETF has accumulated $2.6 million in its asset base and trades in an average daily volume of 2,000 shares. The ETF has charges 85 bps in annual fees.

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