Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL)
ARCA ARCA Primary Summary
IVOL Chart
IVOL: Optionality In The Hands Of An Options Guru
The Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL) offers a convex macro opportunity, designed to hedge rising and falling interest rates via TIPS and curve options. IVOL suffered a 15% drawdown during the unprecedented 2022–2024 yield curve inversion, but historical steepening post-inversion supports a constructive forward outlook. The ETF's options are now cheaper due to a 50% decline in volatility, and IVOL exhibits low to negative correlation with most risk assets, enhancing portfolio diversification.
IVOL: Bond ETF Unconvincingly Playing With Inflation And Yield Curve
Quadratic Interest Rate Volatility and Inflation Hedge ETF combines TIPS exposure with options on yield curve spreads to hedge inflation and rate volatility. IVOL has underperformed both its main holding, SCHP, and peer ETFs, with high volatility and significant drawdowns. IVOL has lost value faster when the yield curve slope was decreasing than it gained when the slope was increasing.
The Stagflation ETF Up 3% This Year
The Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL) historically outperforms during periods of fixed income stress. It's a strong contender when inflation and interest rate volatility threatens, provides mitigation for a stagflation environment, and offers strong performance year to date.
Quadratic Interest Rate Volatility and Inflation Hedge ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| JJT John J. Terril TERRIL BROTHERS Inc. | 676,420 | $18.47M | $11.75M | -$6.72M | -36.4% |
 Adams Wealth Management Adams Wealth Management | 443,506 | $7.89M | $7.72M | -$171,852.57 | -2.18% |
 Keith Dubauskas One Plus One Wealth Management LLC | 872,827 | $16.6M | $15.17M | -$1.43M | -8.6% |
| BFG Bleakley Financial Group LLC Bleakley Financial Group LLC | 242,096 | $4.65M | $4.21M | -$440,527.89 | -9.48% |
 CJ Harrison DecisionPoint Financial LLC | 65 | $1,270 | $1,130.02 | -$139.98 | -11.02% |
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Quadratic Interest Rate Volatility and Inflation Hedge ETF Profile
| ARCA Exchange | US Country |
Overview
The fund operates as an investment entity that primarily focuses on generating returns through a specialized strategy. It actively manages its portfolio with the goal of achieving its investment objectives by primarily investing in two types of financial instruments. First, it invests in U.S. Treasury Inflation-Protected Securities (TIPS), which are government bonds specifically designed to protect against inflation. Secondly, the fund invests in long options that are tied to the shape of the U.S. interest rate curve, which implies a tactical approach to profiting from fluctuations in interest rates. The fund is described as non-diversified, indicating it may concentrate its investments more heavily in certain assets, making it potentially more vulnerable to risk in those areas.
Products and Services
The fund offers investment opportunities through two primary vehicles:
- U.S. Treasury Inflation-Protected Securities (TIPS) - These are securities issued by the U.S. government designed to help investors guard against inflation. TIPS adjust their principal value in accordance with changes in the inflation rate, ensuring that the investment’s real value is preserved. This makes them an attractive option for investors looking to mitigate the negative impact of inflation on their investment returns.
- Long Options Tied to the U.S. Interest Rate Curve - The fund also invests in options that speculate on the future shape of the U.S. interest rate curve. These financial derivatives offer the right, but not the obligation, to buy or sell treasury securities at a predetermined price before a specific date. This approach allows the fund to potentially benefit from movements in interest rates, making it suitable for investors who seek to capitalize on interest rate forecasts.
