NEW YORK, June 29, 2022 (GLOBE NEWSWIRE) — With the most recent print on inflation 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 high and/or rising inflation and inflation expectations as well as during periods of rising 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 is over. We have moved into an inflationary environment that will persist at elevated levels even if current readings ultimately turn out to be peak levels. It is critical that institutional and retail investors find ways to mitigate the destructive elements of high and sustained inflation,” said Doug Fincher, portfolio manager at Ionic. “Now is the time to seek protection against the destruction of purchasing power caused by inflation.”
CPII will invest in consumer price index (CPI) inflation swaps, swaptions (a/k/a swap options) on U.S. interest rates, and short-term TIPS (Treasury securities protected against inflation). This combination provides exposure to high inflation and inflation expectations, rising rates and real yields (nominal yields less inflation).
“Investors have traditionally looked to fixed income securities as a source of diversification for their equity exposure. However, a regime shift to a higher inflationary environment is underway, in which fixed income securities may actually increase risk. Investors are struggling to find investments that will help their portfolios in this type of market,” says John Richardson, COO of 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 wider universe of investors. CPII will offer RIAs, family offices, institutional investors and individuals a fixed income alternative for those concerned about the value of their assets after adjusting for inflation.
This fund will leverage Ionic’s expertise in interest rate derivatives while providing daily liquidity and transparency at an attractive price. 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 investing, relative value arbitrage and value equity strategies on behalf of investment funds. private investment as well as funds regulated under the law on investment companies. of 1940 and under the Undertakings for Collective Investment in Transferable Securities (“UCITS”) Directive. As of June 1, 2022, Ionic had approximately $3.9 billion in assets under management.
About Tidal ETF Services
Formed by ETF industry pioneers and thought leaders, Tidal ETF Services, LLC aims 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 sustainable ideas to market. We are champions of ETF innovation with a mission to help issuers effectively launch their ETFs and maximize their growth potential in a highly competitive space. Learn more about tidaletfservices.com.
Investors should carefully consider the investment objectives, risks, charges and expenses before investing. To obtain a prospectus or simplified prospectus containing this and other information about the Fund, please call (866) 214-2234 or visit our website at www.cpiietf.com. Read the prospectus or simplified prospectus carefully before investing.
Investing involves risk. Main loss is possible. The Fund is new and has a limited operating history.
Risk of change. A swaption is an option contract that gives the holder the right (but not the obligation) to enter into a swap at a pre-determined rate at expiration in exchange for a premium payment. Swaptions allow the Fund to gain exposure that is significantly greater than the premium paid. Therefore, the value of swaptions can be volatile, and a small investment in swaptions can have a large impact on the performance of the Fund. ADVICE Risk. Interest payments on TIPS are unpredictable and will fluctuate as the principal and related interest payments are adjusted for inflation. There can be no assurance that the Consumer Price Index will accurately measure the actual rate of price inflation for goods and services. Risk of non-diversification. Because the Fund is “undiversified”, it may invest a higher 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 developments affecting the issuers in which the Fund invests. Investment Company Securities Risk. To the extent that the Fund invests in other funds, a shareholder will incur two layers of asset-related 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 honor its obligations under the security; failure of an issuer or borrower to pay principal and interest when due; and changes in interest rates affect the prices of fixed income securities. In addition, an increase in prevailing interest rates generally causes the value of existing fixed income securities to fall and often has a significant impact on longer duration and/or higher quality fixed income securities. Fund risk actively managed. Unlike ETFs that track an index, this ETF is actively managed and depends on the portfolio managers’ ability to achieve the fund’s objective.
The Fund invests in a Subsidiary of the Cayman Islands. The Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. 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, except as otherwise stated in the Fund’s Prospectus, is not subject to all of the investor protections provided by law.
The fund is distributed by Foreside Fund Services, LLC.