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Alternative Market Briefing

The Corona Fighters Report 54: Asset managers who delivered in the downturn

Thursday, July 09, 2020

amb
Bailey McCann, Opalesque New York:

This is our regular report on hedge funds and alternative asset managers who are successfully protecting assets and outperforming the markets during the first months of 2020.

An options strategy pays off

In 2019, Quadratic Capital Management launched a first of its kind fixed-income ETF that uses OTC fixed income options. Quadratic Interest Rate Volatility and Inflation Hedge ETF (NYSE Arca: IVOL), is designed to profit from an increase in fixed income volatility and profit from a steepening of the yield curve, whether that occurs via rising long-term interest rates or falling short term interest rates.

The fund has been able to take advantage of the volatility that defined the market over the first half of this year. The strategy was up +6.1% in the second quarter and is up +9.2% year to date. IVOL has also distributed a minimum of 30bps per month since it started paying distributions on July 31, 2019.

IVOL is long interest rate volatility via its access to the OTC fixed income options market. IVOL uses a combination of Treasury InflationProtected Securities (TIPS) and managed OTC options in an active ETF structure. The fund provides exposure to the rates market while working as an uncorrelated hedge/diversifier within a portfolio.

IVOL is managed by Nancy Davis, founder and managing partner of Quadratic Capital Management. Davis founded Quadratic Capital in 2013 as an impact investment firm. The fund fulfills its impact investment goals by providing widespread access to the OTC market and by excluding issuers involved in certain practices, industries, or product lines that fall outside of acceptable sustainability/ESG standards according to the ESG framework published by the SASB Alliance.

Davis will be a presenter during Corona Fighters Episode 4.

View prior reports: Report 53

Webinar: The Corona Fighters Episode 4

Meet five more asset managers who delivered during the meltdown.

Time: Tuesday, July 21st, 10 am EST
Details and registration: www.opalesque.com/webinar/


New eBook: The Corona Fighters COLLECTION - A Handbook for Investors

200+ funds that were up or protected assets in Q1 2020: A Compendium of Opalesque Corona Fighters Report #1 to Report #52

Download here: www.opalesque.com/ebook.

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Disclaimer: This is not investment advice. Opalesque has not verified this information and gives no warranty of accuracy or completeness. Past performance is not indicative of future results. See our Terms & Conditions for more information.

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WEBINARS:

Meet 15 fund managers and learn how and why their strategies delivered positive returns and/or protected capital during the Corona led market meltdown! Each webinar lasts an hour and features five managers.

"The whole Corona Fighters program has been extremely educational for me and a great opportunity to learn more about hedge funds and compare/contrast their approaches." (Single Family Office Principal)

Video replays of Opalesque's past webinars can be found here: www.opalesque.com/webinar/#pastwebinar

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