Roubini Launches Treasury-Alternative ETF to Ride Trump-Era Risk
Nouriel Roubini is seizing on Donald Trump’s inflation-threatening policy agenda to make a case for an alternative haven trade to Treasuries in a world of elevated volatility.
The economist, who built his reputation by correctly warning of a disaster ahead of the 2008 financial crisis, said the popular 60/40 portfolio is braced for pain once more, with Trump’s tariff plan — even just a “mild version” — threatening price stability.
Roubini is using his fame to market a solution to his long-standing bearish warnings, including the risk of a debased dollar and excessive debt load, with the launch of the Atlas America Fund Wednesday under the ticker USAF.
The ETF will invest in climate-change resilient real estate investment trusts, inflation-protected US Treasuries, municipal securities, corporate bonds and gold trusts, among others, according to the prospectus. It will have an expense ratio of 75 basis points.
The actively managed fund comes just as Wall Street braces for a new era of greater wild cards for financial markets, given the president-elect’s vow to break norms on everything from trade policy to Federal Reserve independence. All that risks eroding the diversification benefit of Treasuries in the event that stocks fall, reminiscent of the portfolio-hedging challenges during the pandemic.
“Over the medium term, inflation in the US 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.
