How to Hedge Interest Rate Risk With New ETFs

2min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

The new 5050 portfolio is either underweight 21% or overweight 33%, depending on whether you count the leverage in the 2x 2x long currency ETFs. CCOR omitted for back testing purposes. Below is a back test of the new 5050 portfolios against the S&P and my default accumulation portfolio of similar structure. All these are constructed a little bit differently, although they do all or are all highly correlated because they do tend to go up in value substantially when interest rates going up.

In this episode we answer two emails from Alexi (a/k/a the "Dude") and another from Barry. We discuss funds that are designed to take advantage of rising interest rates like RRH, RISR and PFIX, another Dude-constructed accumulation portfolio with leveraged funds and some portfolio construction rules of thumb, and the noisy-ness of correlation data and matrices.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

PFIX Webpage and Resources: PFIX Simplify Interest Rate Hedge ETF | Simplify

The Dude's New Portfolio Constructions compared with S&P500: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)

Portfolio Visualizer Correlation Tool: Asset Correlations (portfoliovisualizer.com)

Bogleheads Post about Morningstar Correlation Data: Morningstar Correlation Matrix - Bogleheads.org

Support the show