IVOL vs PFIX

IVOLDQuadratic Interest Rate Volatility and Inflation Hedge ETF

PFIXBSimplify Interest Rate Hedge ETF

In short

IVOL The original curve-shape ETF. A core of inflation-protected Treasuries wrapped in long options on the 2-year/10-year rate curve, so it responds to inflation expectations and rate volatility, not just bond prices.

PFIX A rate hedge built from an institutional tool. PFIX holds a long-dated OTC payer swaption on the 20-year rate, designed to behave much like owning puts on long Treasury bonds, and it launched in 2021 as the first ETF to package that trade.

Stated mandate

IVOL The fund seeks to hedge fixed-income volatility, inflation expectations, and yield-curve steepening through inflation-protected U.S. Treasury securities and long OTC interest-rate options.

PFIX The fund is designed to hedge against rising long-term interest rates and potentially benefit when fixed-income volatility and market stress increase.

Why people hold it

• IVOL Unusual plumbing: at least 80% sits in inflation-protected Treasuries or cash, with the rest in fully funded, long-only OTC options on the 2s10s curve.kraneshares.comkraneshares.com 2
• The option sleeve is fully funded and long-only, so the curve exposure is not built on borrowed money.kraneshares.com
• Actively managed since its May 2019 launch, it pays monthly from the TIPS core while the options do the hedging work.kraneshares.com

• PFIX Direct, convex exposure to a jump in long-term rates: the payer swaption is structured to gain value as long-dated rates rise, similar to long-dated puts on 20-year Treasuries.simplify.us
• 0.50% expense ratio undercuts the 0.63% median in its hedging cohort and peers like CAOS (0.63%) and TAIL (0.59%), one of the stronger builds in that group.
• The swaption is a strategic holding, reset only after long stretches or extreme rate moves, not rolled every month.simplify.us
• Collateral sits in Treasuries and TIPS, and the fund distributes monthly inside a standard 1940 Act ETF wrapper.simplify.us

Worth knowing

• IVOL 0.98% net of a waiver through August 1, 2028 (1.02% gross) runs above the category median and above rate-hedge peers like PFIX at 0.50% and CAOS at 0.63%.
• Long options are a long-volatility stance: when the curve sits still, the premiums paid can decay and weigh on results. The sleeve can lose what was paid for it.kraneshares.com
• Non-diversified by design and only moderately traded, so spreads and the OTC option positions deserve a look before you size it.yahoo.com

• PFIX It is engineered to move against long bonds, so the same mechanics that pay off when long rates spike work in reverse when rates fall.simplify.us
• Swaptions are options: value can erode with time and with calmer rate volatility, so carrying the hedge through quiet markets has a cost.simplify.us
• A concentrated OTC derivative position brings counterparty exposure and sharp NAV swings, and the fund is only moderately traded.simplify.us

Full IVOL profile⁠

Full PFIX profile⁠