TAIL: With Bond-Equity Correlations Back To Positive, This ETF Is Set To Underperform (Rating Downgrade)
Source: SeekingAlpha
2026-05-18 12:38:56 ET
Thesis
Buy-and-hold hedging vehicles that produce robust long-term results are very difficult to find. By definition, 'hedging' means spending money in order to protect against an event, and thus hedging usually results in negative carry (i.e., negative returns). Historic negative correlations between bonds and equities (i.e., one moves up when the other moves down) have resulted in a number of hedging funds that use bonds as building blocks. The general idea is that when you have a risk-off market, participants pile into treasuries, thus increasing the value and NAVs of said funds....
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TAIL: With Bond-Equity Correlations Back To Positive, This ETF Is Set To Underperform (Rating Downgrade)
