Interest Rate Hedge ETF (PFIX) Hits New 52-Week High
For investors seeking momentum, Simplify Interest Rate Hedge ETF PFIX is probably on the radar. The fund just hit a 52-week high and is up 87.5% from its 52-week low price of $37.38/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
PFIX in Focus
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. The product charges 50 bps in annual fees (see: all the Government Bond ETFs here).
Why the Move?
The interest rate hedge corner of the fixed-income market has been an area to watch lately due to rising interest rates. Investors are flocking to PFIX to combat rising rate worries. The Fed raised interest rates by 75 bps for the fourth consecutive time in September, which pushed the benchmark rate to 3.0-3.25%, the highest level since 2008. With inflation nearly at a 40-year high, the central bank also signaled that additional large rate hikes are on the way.
More Gains Ahead?
Currently, PFIX might remain strong given a weighted alpha of 81.26 and 20-day volatility of 45.28%. As a result, there is definitely still some promise for risk-aggressive investors, who want to ride on this surging ETF.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
