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To offset the costly 'bleed' of buying S&P 500 put options, the Cambria Tail Risk ETF invests the majority of its capital in 10-year Treasuries instead of short-term T-Bills. This introduces a duration risk of roughly 7.5 years, making the fund highly sensitive to interest rate fluctuations. Because of its heavy exposure to 10-year Treasuries, TAIL's net asset value (NAV) declines when interest rates rise.
The Cambria Tail Risk ETF offers downside protection for a stock portfolio via S&P 500 put options and U.S. Treasuries. TAIL outperforms inverse S&P 500 ETFs (SH, SDS) on risk-adjusted returns when used to hedge a core stock portfolio. The mid-term VIX futures ETF delivers superior risk-adjusted returns vs. TAIL but requires monitoring due to VIX futures complexity.
On Oct 10, 2025, Wall Street saw about $2 trillion in market value wiped out. However, ETFs like SIVR, TAIL, URA, PZA, and VNM held steady.
Inverse and hedging-based ETFs won in the worst week of Wall Street since 2020.
The president's tariff wars have caused a bear market without fundamental economic changes, making TAIL ETF a crucial hedge. TAIL ETF, with its long bond position and S&P 500 puts, has performed well, compensating for SPY losses and outperforming other ETFs. TAIL is a buy-and-hold hedge, unlike other instruments, offering balanced portfolio risk reduction and long-term stability.
We have highlighted three ETFs each from the best and worst-performing zones of last week.
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.