Turning a Liability Into an Asset

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

Inflation is all over the news these days, and everyone is suggesting ways to avoid its impact on you and your assets.

Some market experts are suggesting that Bitcoin and other cryptocurrencies are the way to go, while others have made tried-and-true gold, silver and precious metals stocks their hedges against the effects of inflation.

After all, inflation erodes your purchasing power by requiring you to spend more of your hard-earned money to buy the things that you need and want. Inflation also reduces the desire for both the public and corporations to invest in the inputs that make the economy hum along. Plus, inflation lowers the value of pensions, savings and Treasury notes, potentially leaving retirees out in the cold financially.

However, what if I told you that there was a way to turn the corrosive effects of inflation into a force that helps, rather than hurts? One potential way to do so is via the Quadratic Interest Rate Volatility and Inflation Hedge ETF (NYSEARCA: IVOL).

This first-of-its-kind exchange-traded fund (ETF) attempts to protect against inflation by using Treasury Inflation-Protected Securities (TIPS), TIPS-based ETFs and long options. While the majority of its assets fall into one of the three categories above, the fund’s managers are also able to invest in both cash and interest-rate swaps that capitalize on a traditional herald of inflation: an anticipated gap, or a steepening, between the 10-year and 2-year Treasury note yields.

Currently, the fund is only invested in three areas: the Schwab U.S. TIPS ETF (NYSEARCA: SCHP), 85.10%; the U.S. Dollar, 9.79%; and options, 5.11%.

Exclusive  Invest in High-Yield Companies with This Fund

This fund’s performance has been relatively strong, even when including the damage done by the COVID-19 pandemic. As of June 1, IVOL has been up 0.69% over the past month and up 1.83% for the past three months. It is currently up 4.09% year to date.

Chart courtesy of StockCharts.com

The fund has amassed $3.23 billion in assets under management and has an expense ratio of 0.99%, making it more expensive to hold than many other ETFs.

In short, while IVOL does provide an investor with a way to turn inflation into a positive force, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader


Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor