This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Nancy Davis, founder and CIO of Quadratic Capital, and manager of the Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL).
Among the topics discussed:
No one can be certain of the inflation outlook - be it the Fed’s “transitory,” or somewhat more persistent than that, or of the runaway type

No matter the outlook, we’re all naturally “short” inflation, so should look to have at least some exposure to higher inflation in our portfolios

The IVOL holds about 85% of assets in inflation-protected Treasurys (TIP), and uses the remainder of assets to go long fixed-income volatility

The benchmark Bloomberg Barclays Aggregate Bond Index (ETF version: [[AGG]]) has no inflation protection among its holdings, and - through its high allocation to MBS - is actually short volatility

The recent rally in Treasurys - which has sent the 10-year yield down to 1.36% - doesn’t make a whole lot of sense given strong economic growth and perky inflation. Is a slowdown on the way, or are investors too aggressive in pricing in rate hikes, or have central bank asset purchases erased the idea of price discovery?

Why gold is overrated as an inflation hedge

Links:
The Quadratic Interest Rate Volatility and Inflation Hedge ETF

Listen to or subscribe to Alpha Trader on these podcast platforms:

Apple Podcasts

Spotify

Google Play

Stitcher


Learn more about your ad choices. Visit megaphone.fm/adchoices