--- title: Using RISR – FolioBeyond’s Rising Rates ETF – to Help Navigate Ongoing Market Volatility description: "The volatility seen in financial markets over the last several months has been remarkable, and even a little bit scary.\nThe stock market has swung from an all-time high of about 4800 on the S&P 500 , to a gut-wrenching low of 3667, a drop of 23.5% in less than 6 months. It has since recovered a bit, but the ride has been extremely volatile with three significant dead-cat bounces of 11%, 7% and 5.5%, respectively." image: https://blog.foliobeyond.com/hubfs/Businessman%20looking%20at%203d%20road%20that%20goes%20up%20in%20the%20sky%20concept.jpeg --- [![FolioBeyond-logo-sm](https://blog.foliobeyond.com/hs-fs/hubfs/FolioBeyond-logo-sm.png?width=180&height=68&name=FolioBeyond-logo-sm.png "FolioBeyond-logo-sm")](https://blog.foliobeyond.com) Open main menu Close main menu - [Home](https://www.etfs.foliobeyond.com/) - Our ETFS Open the submenu - [RISR](https://www.etfs.foliobeyond.com/risr) - [Glossary](https://www.etfs.foliobeyond.com/glossary) - [News](https://www.etfs.foliobeyond.com/news) - [Blog](https://blog.foliobeyond.com/) - [Contact](https://www.etfs.foliobeyond.com/contact) [Inflation](https://blog.foliobeyond.com/tag/inflation) [Rising Interest Rates](https://blog.foliobeyond.com/tag/rising-interest-rates) [Bonds](https://blog.foliobeyond.com/tag/bonds) [Volatility](https://blog.foliobeyond.com/tag/volatility) [Diversification](https://blog.foliobeyond.com/tag/diversification) # Using RISR – FolioBeyond’s Rising Rates ETF – to Help Navigate Ongoing Market Volatility [Dean Smith](https://blog.foliobeyond.com/author/dean-smith) [Share this blog post on Twitter](https://twitter.com/intent/tweet?text=I+found+this+interesting+blog+post&url=https://blog.foliobeyond.com/using-risr-to-help-navigate-ongoing-market-volatility) [Share this blog post on Facebook](http://www.facebook.com/share.php?u=https://blog.foliobeyond.com/using-risr-to-help-navigate-ongoing-market-volatility) [Share this blog post on LinkedIn](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.foliobeyond.com/using-risr-to-help-navigate-ongoing-market-volatility) ![](https://blog.foliobeyond.com/hubfs/Businessman%20looking%20at%203d%20road%20that%20goes%20up%20in%20the%20sky%20concept.jpeg) --- The volatility seen in financial markets over the last several months has been remarkable, and even a little bit scary. The stock market has swung from an all-time high of about 4800 on the S&P 5001, to a gut-wrenching low of 3667, a drop of 23.5% in less than 6 months. It has since recovered a bit, but the ride has been extremely volatile with three significant dead-cat bounces of 13%, 7% and 5.5%, respectively. [![FolioBeyond-RISR-Market-Volatility](https://blog.foliobeyond.com/hs-fs/hubfs/Businessman%20looking%20at%203d%20road%20that%20goes%20up%20in%20the%20sky%20concept.jpeg?width=760&name=Businessman%20looking%20at%203d%20road%20that%20goes%20up%20in%20the%20sky%20concept.jpeg)](https://blog.foliobeyond.com/) Meanwhile in bonds, the supposedly quiet part of the market, volatility has risen to levels not seen since the 2007-08 financial crisis. Year-to-date, RISR is up just under [25%](https://www.etfs.foliobeyond.com/risr) with a comparatively modest drawdown of 14.5%. Our realized volatility of around half that of the S&P, and 75% less than PFIX2. Why has RISR been able to weather this volatility so well? - Our strategy benefits from an **inherent diversification** from most other markets. - We have a low correlation to equities, commodities, and the highly volatile technology sector. - Our mortgage-related interest-only investments naturally tend to move inversely to the rest of the bond market. - In short, we believe RISR is a great diversifier to many other strategies you might now be invested in. - RISR benefits from **significant current income** that helps to stabilize returns and cushions price volatility. - Our most recent monthly dividend of $0.12/share equates to an annualized rate of about 4.7%. That is more than 80% of the fixed income ETFs out there, and even compares favorably to some income-based strategies like utilities.3 - But unlike utilities stocks, which fall in value when interest rates rise, RISR is designed to increase in value during periods of rising interest rates. - RISR’s MBS IO investment are **liquid and transparent**, as compared with over-the-counter derivative-based strategies like PFIX. - MBS IOs are issued by government-sponsored agencies including Fannie Mae, Freddie Mac and Ginnie Mae. - Our strategy does not use third-party leverage to achieve its returns. - Our investments are broadly held by a wide range of institutional investors, can be traded by dozens of broker-dealers and are priced by all major independent pricing services. We do not use “model pricing.”   We think RISR provides a distinct risk-return profile not available from any other publicly traded ETF product or index – current income, diversification, low volatility, and a hedge against interest rates risk. This profile can offer benefits to a broad range of investors and strategies seeking to actively manage interest rate risk, while not sacrificing current income in the process. Please reach out to one of our distribution professionals for more information.   Footnotes 1The S&P 500 is a broadly followed index of large-capitalization US equities. 2Source: Bloomberg, L.P. RISR volatility13.4%, S&P 500 volatility 21.3%, PFIX volatility 41.8%. PFIX is an ETF that invests principally in over-the-counter interest rate options with the goal to “provide a hedge against a sharp increase in long-term interest rates.” RISR’s strategy is to invest in mortgage-backed interest only securities that are expected to increase in value as interest rates increase. 3Bloomberg, L.P. tracks 546 fixed income ETF, of which 452 show a dividend yield less than 4.7%   ---   | Yung Lim | Dean Smith | George Lucaci | | --- | --- | --- | | Chief Executive Officer | Chief Strategist and Marketing Officer | Global Head of Distribution | | Chief Investment Officer | RISR Portfolio Manager |   | | ylim@foliobeyond.com | dsmith@foliobeyond.com | glucaci@foliobeyond.com | | 917-892-9075 | 914-523-2180 | 908-723-3372 | ---   Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (866) 497-4963 or visit our website at [www.etfs.foliobeyond.com](http://www.etfs.foliobeyond.com). Read the prospectus or summary prospectus carefully before investing. **The performance data quoted is past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (866) 497-4963 or by clicking** [**here**](http://www.etfs.foliobeyond.com/risr)**. Due to market conditions the fund has experienced relatively high performance which may not be ongoing or sustainable over time.** Investments involve risk. Principal loss is possible. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value. The fund is new and has limited operating history to judge. Fund Risks - The value of MBS IOs is more volatile than other types of mortgage related securities. They are very sensitive not only to declining interest rates, but also to the rate of prepayments. MBS IOs involve the risk that borrowers may default on their mortgage obligations or the guarantees underlying the mortgage-backed securities will default or otherwise fail and that, during periods of falling interest rates, mortgage-backed securities will be called or prepaid, which may result in the Fund having to reinvest proceeds in other investments at a lower interest rate. The Fund’s derivative investments have risks, including the imperfect correlation between the value of such instruments and the underlying assets or index; the loss of principal, including the potential loss of amounts greater than the initial amount invested in the derivative instrument. The value of the Fund’s investments in fixed income securities (not including MBS IOs) will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned indirectly by the Fund. Please see the prospectus for a complete description of principal risks. Distributed by Foreside Fund Services, LLC. ## Related Articles [![FolioBeyond-Misplaced-optimism](https://blog.foliobeyond.com/hubfs/Businesswoman%20walking%20up%20staircase%20to%20door%20in%20sky.jpeg)](https://blog.foliobeyond.com/misplaced-optimism) [Inflation](https://blog.foliobeyond.com/tag/inflation) [Recession](https://blog.foliobeyond.com/tag/recession) [Fed Funds Rate](https://blog.foliobeyond.com/tag/fed-funds-rate) ### [Misplaced Optimism? – August 2022 Macro Commentary](https://blog.foliobeyond.com/misplaced-optimism) Last week I listened to a few asset managers retract their "recession is imminent/inflation is receding" arguments that they imposed on their investors for the last... [George Lucaci](https://blog.foliobeyond.com/author/george-lucaci) [Read More](https://blog.foliobeyond.com/misplaced-optimism) [![](https://blog.foliobeyond.com/hubfs/Businessman%20standing%20in%20front%20of%20opened%20doors%20and%20making%20decision.jpeg)](https://blog.foliobeyond.com/september-2022-macro-commentary) [Inflation](https://blog.foliobeyond.com/tag/inflation) [Rising Interest Rates](https://blog.foliobeyond.com/tag/rising-interest-rates) [Bonds](https://blog.foliobeyond.com/tag/bonds) [Volatility](https://blog.foliobeyond.com/tag/volatility) [Diversification](https://blog.foliobeyond.com/tag/diversification) ### [September 2022 Macro Commentary - Investing in Hope](https://blog.foliobeyond.com/september-2022-macro-commentary) (3-minute read) Investors have a long history of incorrectly assuring themselves that certain inescapable realities won't occur. The rise in interest rates and endemic... [George Lucaci](https://blog.foliobeyond.com/author/george-lucaci) [Read More](https://blog.foliobeyond.com/september-2022-macro-commentary) ![FolioBeyond-logo-sm](https://blog.foliobeyond.com/hs-fs/hubfs/FolioBeyond-logo-sm.png?width=200&height=75&name=FolioBeyond-logo-sm.png "FolioBeyond-logo-sm") ### Contact (866)497-4963 risr@foliobeyond.com - Menu Item One - Menu Item Two - Menu Item Three ## Subscribe Sign up with your email address to receive news and updates. --- Important Information Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. This and other information is in the prospectus. A prospectus may be obtained by clicking [here](https://www.etfs.foliobeyond.com/s/RISR-Prospectus.pdf). Please read the prospectus carefully before you invest. For standardized performance, please click [here](https://www.etfs.foliobeyond.com/risr). The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (866) 497-4963. ***Fund Risks:*** An investment in the Fund is subject to numerous risks including the possible loss of principal. There can be no assurance that the Fund will achieve its investment objective.  Equity securities, such as common stocks, are subject to market, economic and business risks that may cause their prices to fluctuate. As with all ETFs, Fund shares may be bought and sold in the secondary market at market prices. The market price normally should approximate the Fund’s net asset value per share (NAV), but the market price sometimes may be higher or lower than the NAV. The Fund is new with a limited operating history. There are a limited number of financial institutions authorized to buy and sell shares directly with the Fund, and there may be a limited number of other liquidity providers in the marketplace. There is no assurance that Fund shares will trade at any volume, or at all, on any stock exchange. Low trading activity may result in shares trading at a material discount to NAV. Please see the [prospectus](https://www.etfs.foliobeyond.com/s/RISR-Prospectus.pdf) and [summary prospectus](https://www.etfs.foliobeyond.com/s/RISR-SummaryProspectus.pdf) for a complete description of principal risks. The value of MBS IOs is more volatile than other types of mortgage-related securities. They are very sensitive not only to declining interest rates, but also to the rate of prepayments. MBS IOs involve the risk that borrowers may default on their mortgage obligations or the guarantees underlying the mortgage-backed securities will default or otherwise fail and that, during periods of falling interest rates, mortgage-backed securities will be called or prepaid, which may result in the Fund having to reinvest proceeds in other investments at a lower interest rate. The Fund's derivative investments have risks, including the imperfect correlation between the value of such instruments and the underlying assets or index; the loss of principal, including the potential loss of amounts greater than the initial amount invested in the derivative instrument. The value of the Fund's investments in fixed income securities (not including MBS IOs) will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned indirectly by the Fund. Distributed by Foreside Fund Services, LLC.