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Bryce Doty Recommends Sit Rising Rate ETF For Protection Against Raising Interest Rates

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Bryce Doty of Sit Investment Association spoke on CNBC about Sit Rising Rate ETF (NYSE: RISE). He explained that the ETF is designed to provide protection to a portfolio of bonds against rising interest rates.

Doty said that yield on two- and five-year maturity Treasury futures is going to increase the most in the rising interest rates environment and the ETF is designed to benefit the most if that scenario happens. To achieve this result the ETF is shorting two- and five-year Treasury futures contracts. Doty explained that investors can go to Sit Rising Rate ETF website and calculate how much money they have to allocate to the ETF to hedge their interest rates risk. It is usually necessary to allocate only 15 percent to Sit Rising Rate ETF to cut interest rates risk in half.

The fund is new, but the strategy has been used by institutional investors over three years ago.

 

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