For Immediate Release
Chicago, IL – September 23, 2022 – Zacks.com announces the list of stocks and ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: iPath Lead Subindex TR Sm Index ETN LD, Simplify Tail Risk Strategy ETF CYA, iPatha.B Cotton Subindex TR ETN BAL, Tuttle Capital Short Innovation ETF SARK and Extended Dur Treasury Index ETF Vanguard EDV.
Here are highlights from Thursday’s Analyst Blog:
ETFs That Won After Fed Rate Hike
The Federal Reserve hike benchmark interest rates by another 75 bps and indicated it will keep hiking well above the current level to tame sky-high inflation. Fed officials signaled the intention of continuing to hike until the funds level hits a “terminal rate,” or end point, of 4.6% in 2023, per a CNBC article. That implies a quarter-point rate hike next year but no decreases.
The median Federal Funds rates are now projected to be 4.4% for 2022 (from 3.4% projected in June). For 2023, the same is projected to be 4.6% (from 3.8% in June) and for 2024, the same is projected to be 3.9% (from 3.4% in 2024).
The Fed also hiked its inflation forecast for the year. The central bank now expects the median inflation rate to jump to 5.4% this year, higher than its previous forecast of 5.2%. PCE inflation expectation has gone up to 2.8% for 2023 from 2.6% projected in December. The Fed downgraded its forecast for 2022 median real GDP growth from 1.7% in June to 0.2% for 2022. It lowered the growth rate expectations for 2023 and 2024 to 1.2% and 1.7% from 1.7% and 1.9%, respectively.
With the possibility of a hawkish Fed in 2022 and 2023, short-term government bond yields rose. Two-year U.S. treasury yield jumped to4.02% on Sep 21 from 3.96% recorded on the day earlier. Benchmark bond yields fell to 3.51% from 3.57% recorded on Sep 20. Key U.S. equity indexes dropped post Fed meeting.
Against this backdrop, below we highlight a few ETFs that rose yesterday. These ETFs mainly came from the areas like commodities, alternative ETFs and inverse ETFs.
ETFs in Focus
iPath Lead Subindex TR Sm Index ETN – Up 6.80%
The underlying Bloomberg Lead Subindex Total Return reflects the returns that are potentially available through an unleveraged investment in the futures contracts on lead. The fund charges 70 bps in fees.
Simplify Tail Risk Strategy ETF – Up 5.5%
This ETF is active and does not track a benchmark. The Simplify Tail Risk Strategy ETF seeks to provide investors with a standalone solution for hedging diversified portfolios against severe equity market selloffs. The fund charges 50 bps in fees and yields 7.80% annually.
iPatha.B Cotton Subindex TR ETN – Up 3.7%
The underlying Bloomberg Cotton Subindex Total Return reflects the returns that are potentially available through an unleveraged investment in the futures contracts on cotton. The fund charges 45 bps in fees.
Tuttle Capital Short Innovation ETF – Up 2.7%
This ETF is active and does not track a benchmark. The AXS Short Innovation Daily ETF seeks the daily inverse investment results and is intended to be used as a short-term trading vehicle. The fund charges 75 bps in fees.
Extended Dur Treasury Index ETF Vanguard – Up 2.4%
The underlying Bloomberg U.S. Treasury STRIPS 20—30 Year Equal Par Bond Index includes zero-coupon U.S. Treasury securities, which are backed by the full faith and credit of the U.S. government, with maturities ranging from 20 to 30 years. The fund charges 6 bps in fees and yields 3.01% annually.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Vanguard Extended Duration Treasury ETF (EDV): ETF Research Reports
iPath Series B Bloomberg Cotton Subindex Total Return ETN (BAL): ETF Research Reports
iPath Bloomberg Lead Subindex Total Return ETN (LD): ETF Research Reports
Simplify Tail Risk Strategy ETF (CYA): ETF Research Reports
AXS Short Innovation Daily ETF (SARK): ETF Research Reports
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Zacks Investment Research