The Bloomberg U.S. Aggregate Bond Index is composed of approximately 35% mortgage-backed securities and callable corporate bonds.
The MOVE Index, which measures implied volatility in U.S. interest rate markets, has dropped 45% over the past three years.
With approximately 7 basis points of Fed hikes (not cuts) currently priced in for the rest of 2026, the market may be underappreciating the broad range of potential outcomes.
IVOL holds at least 80% of its portfolio in inflation-protected Treasuries or cash, providing inflation-linked income as its defensive core.
DNY59/iStock via Getty Images
Equity markets are near all-time highs. Implied volatility is near multi-year lows. For most investors, that's reassuring. Nancy Davis, portfolio manager for The Quadratic Interest Rate Volatility and Inflation Hedge ETF, thinks it's a reason to pay closer attention.
