The fund seeks to generate positive returns during periods of elevated inflation and rising interest rates
NEW YORK, June 29, 2022 (GLOBE NEWSWIRE) -- With the most recent inflation print at a 40-year high, Ionic Capital Management LLC (Ionic) in partnership with Tidal ETF Services, LLC (Tidal) launches the Ionic Inflation Protection ETF (NYSE: CPII). The actively managed fund seeks to generate positive returns during periods of elevated and/or rising inflation and inflation expectations as well as during periods of increasing interest rates and fixed income volatility.
“While the world has been in a deflationary environment for the past few decades, it now appears that period has ended. We have shifted to an inflationary environment that will persist at elevated levels even if current readings ultimately prove to be peak levels. It is critical that institutional and retail investors find ways to mitigate the destructive elements of sustained elevated inflation,” says Doug Fincher, Portfolio Manager at Ionic. “Now is the time to seek protection from the destruction of purchasing power caused by inflation.”
CPII will invest in inflation swaps on the Consumer Price Index (CPI), swaptions (a/k/a swap options) on U.S. interest rates and short-duration TIPS (Treasury inflation-protected securities). This combination provides exposure to elevated inflation and inflation expectations, rising rates and real yields (nominal yields minus inflation).
“Investors have traditionally viewed fixed income as providing diversification to their equity exposure. However, there is a regime change to a higher inflationary environment underway where fixed income may actually be risk additive. Investors are struggling to find investments that will help their portfolios in this type of market,” says John Richardson, Chief Operating Officer at Ionic. “With the launch of CPII, we are able to bring inflation protection strategies historically only available in our private funds to the ETF space accessible to a broader universe of investors. CPII will give RIAs, family offices, institutional and retail investors a fixed income alternative for those who are worried about the value of their assets after adjusting for inflation.”
This fund will leverage Ionic’s interest rate derivatives expertise while offering daily liquidity and transparency at an attractive fee. For more information visit CPIIetf.com
About Ionic Capital Management LLC
Ionic Capital Management LLC (“Ionic”) is a New York based alternative asset manager that employs long volatility, relative value arbitrage, and value equity investment strategies on behalf of private investment funds as well as funds that are regulated pursuant to the Investment Company Act of 1940 and under the Undertakings for Collective Investments in Transferable Securities Directive (“UCITS”). As of June 1, 2022, Ionic has approximately $3.9 billion in assets under management.
About Tidal ETF Services
Formed by ETF industry pioneers and thought leaders, Tidal ETF Services, LLC sets out to thoughtfully disrupt the way ETFs have historically been developed, launched, marketed, and sold. With a focus on helping ETF issuers, Tidal offers a comprehensive suite of services, proprietary tools, and methodologies designed to bring lasting ideas to market. We are advocates for ETF innovation on a mission to help issuers efficiently and effectively launch their ETFs and optimize their growth potential in a highly competitive space. Learn more at tidaletfservices.com.
Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (866) 214-2234 or visit our website at www.cpiietf.com. Read the prospectus or summary prospectus carefully before investing.
Investment involve risk. Principal loss is possible. The Fund is new and has limited operating history.
Swaptions Risk. A swaption, is an option contract that give the holder the right (but not the obligation) to enter into a swap at a predetermined rate at expiration in exchange for a premium payment. Swaptions enable the Fund to purchase exposure that is significantly greater than the premium paid. Consequently, the value of swaptions can be volatile, and a small investment in swaptions can have a large impact on the performance of the Fund. TIPS Risk. Interest payments on TIPS are unpredictable and will fluctuate as the principal and corresponding interest payments are adjusted for inflation. There can be no assurance that the Consumer Price Index will accurately measure the real rate of inflation in the prices of goods and services. Non-Diversification Risk. Because the Fund is “non-diversified”, it may invest a greater percentage of its assets in securities of a single issuer or fewer issuers than a diversified fund, which may expose the Fund to the risks associated with the developments affecting the issuers in which the Fund invests. Investment Company Securities Risk. To the extend that the Fund invests in other funds, a shareholder will bear two layers of asset-based expenses, which could reduce returns. Derivatives Risk. The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund’s gains or losses. Debt Securities Risk. The Fund may invest in debt securities which are subject to the risks of the issuer’s inability to meet its obligations under the security; failure of an issuer or borrower to pay principal and interest when due; and interest rate changes affect the prices of fixed income securities. In addition, an increase in prevailing interest rates typically causes the value of existing fixed income securities to fall and often has a great impact on longer duration and/or higher quality fixed income securities. Actively Managed Fund Risk. Unlike ETFs that track an index, this ETF is actively managed and dependent upon the ability of the portfolio managers to achieve the Fund’s objective.
The Fund invests in a Cayman Island Subsidiary. The Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. The swaps, swaptions and other investments held by the Subsidiary are subject to the same economic risks that apply to similar investments if held directly by the Fund. The Subsidiary is not registered under the Securities and Exchange Act of 1940, and unless other wise noted in the Prospectus for the Fund, is not subject to all the investor protections of the Act.
The fund is distributed by Foreside Fund Services, LLC.
CONTACT: Darby Rowe Darby@gregoryfca.com 610-228-2148