Cambria Tail Risk Price, Forecast, Insider, Ratings, Fundamentals & Signals

After a sturdy run so far this year, Wall Street started to waver in mid-March, following the release of hot U.S. inflation data and the rise in bond yields.

Overstretched valuations and uncertainty around when the Fed will begin to cut rates have dampened investors' optimism. Investors are increasingly exploring diversified strategies that help to protect their portfolios from downside risk.

Cambria Tail Risk ETF failed to provide downside protection during the 2022 bear market as markets had too many 'tail hedges'. However, heading into 2024, market complacency and proliferation of structured income products may lead to a market 'accident'. I'm upgrading the TAIL ETF as a contrarian buy within a portfolio to hedge against tail events.

The rout in the U.S. bond market has deepened on growing anticipation of persistently high interest rates, sending shockwaves across the global economy and financial market.

Cambria Tail Risk ETF seeks to mitigate significant downside market risk, and falls in the hedging instruments portfolio allocation bucket. TAIL's holdings consist of a 10-year treasury bond and a ladder of SPY puts, designed to provide a positive return during an equity market collapse. TAIL was not an appropriate hedging instrument in a rising rates environment such as 2022, but will see its fortunes change as we move back towards a negative bonds/equities correlation.

As markets navigate the typical end-of-summer lull, investors are increasingly exploring diversified strategies that help to protect their portfolios from downside risk.

While the stock market has defied expectations in 2023 and reached new heights, there are valid reasons to approach the current situation with caution. The excitement for AI, the concentration of stocks in a few firms and still-present inflationary pressure indicate potential bubbles.

According to a recent study, more than half of the risk-managed strategies that underlie ETFs designed to manage losses during market turbulence failed to fare better than equities in 2022, including several strategies marketed as hedges against black swan-type events.

TAIL is an ETF that is at its best when 2 things are happening at the same time. That might be happening right now. The 10-year US Treasury Bond price is rising, and the S&P 500 is threatening to drop, which drives the 10% of this ETF that is invested in SPX put options.

TAIL is an ETF that combines US Treasury Bonds with a bear market "kicker" in the form of a laddered set of SPX put options. TAIL is somewhat of a sleeping giant at times like this, given the nature of "tail risk" options.