Roubini Launches Treasury-Alternative ETF to Ride Trump-Era Risk

“Over the medium term, inflation in the U.S. and advanced economies are going to go gradually higher,” Roubini said.

“In a world where long rates may go higher, either because of inflation or because large debt and deficit imply higher real rates, that’s a world in which the defensive asset makes you lose money and sometimes makes you lose money more than the risky asset. And you have to find alternatives,” he added.

After cratering in the pandemic-spurred inflation fallout, the strategy of putting 60% of assets in equities and 40% in Treasurys has staged somewhat of a comeback, though the investing style snapped a five-month winning streak in October as the strength of the U.S. economy spurred a bond rout.

The new fund will be the first ETF for Atlas Capital Team, a fintech company that Roubini co-founded to help develop investing strategies that protect against high-risk regimes including out-of-control inflation, climate change and civil unrest.

Roubini, who also runs Roubini Macro Associates, is the latest in a long list of prominent economists and investors to attach their names to ETFs.

“We see this ETF as somewhat of an alternative long duration Treasurys,” he said. “You want a defensive aspect. But the traditional defensive aspect in a world of a variety of risks is not likely to be defensive.”

Initial plans for the ETF were conceived during the first Trump administration, with the team tapping into growing concerns about the future role of the dollar in the global financial system as well as plans to further invest in America, said Reza Bundy, Atlas chief executive officer.

The firm is currently in talks with Gulf-based sovereign wealth funds that are evaluating the need to adjust their U.S. Treasury holdings but may want to keep their exposure to the U.S. dollar.

“This instrument would be important for years to come given the debt load of the U.S. and given the key dollarization movements that are occurring all over the world,” Bundy said.

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