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The Fund’s investment objective is capital appreciation in elevated and rising inflationary environments.
CPII seeks to provide a solution for investors who want exposure to an investment designed to profit from elevated inflation and increasing inflation expectations.
Firm inception: 2006
Portfolio managers:
Inflation drives market volatility through interest rate uncertainty, earnings instability, and bond market fluctuations. Central banks often raise interest rates to curb inflation, making borrowing more expensive and slowing economic growth, which can trigger market swings. Higher costs also squeeze corporate profits, leading to stock price drops if businesses can’t pass expenses to consumers. Additionally, inflation erodes bond values, pushing yields up and prices down, unsettling investors. These factors combined make inflation a major source of financial market instability. A well-diversified portfolio with inflation-resistant investments can help maintain stability and long-term financial security.
The inception date of the ETF is 6/28/2022.
Ionic Capital Management LLC 100%
CPII
02368W507
US02368W5076
NYSE Arca, Inc.
6/28/2022
0
525,000
Per the current prospectus.0.75%
0.002038
0.358828%
Zero Coupon 5-Year Inflation Swaps
Benefits from high realized inflation and increases in inflation expectations
2-Year Payer Swaptions on 5-Year U.S. Rates
Benefits from increasing interest rates
Treasury Inflation-Protected Securities (TIPS)
Benefits from rising inflation and provides a yield to supplement derivative exposures
Inflation: A general rise in prices throughout the U.S. economy, which the Fund measures using the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers (the “CPI-U”).
Inflation Swap: Swaps are derivative contracts where one party “swaps” one type of cash flow for a different type of cash flow. In an inflation swap, one party agrees to pay to the other party the percentage increase in CPI-U during the term of the swap, while the other party agrees to pay back a fixed rate. The inflation swaps held by the Fund will typically increase in value if inflation increases and decrease in value if inflation decreases.
Swaption: A swaption is an option on a swap agreement that gives the buyer the right, but not the obligation, to enter into a swap on a future date in exchange for paying a market-based “premium.” The Fund expects to focus on so-called “payer swaptions,” which give the Fund the right to pay fixed-rate payments and, in exchange, receive floating rate payments. Swaptions held by the Fund will typically increase in value if interest rates rise, and decrease in value if interest rates fall.
TIPS: U.S. Treasury Inflation-Protected Securities (“TIPS”) are marketable securities issued by the U.S. Treasury whose principal is adjusted based on changes in the CPI-U. With inflation, the principal increases, and with deflation (a decrease in the CPI-U), the principal decreases. The relationship between TIPS and inflation affects both the principal amount paid when a TIPS instrument matures and the amount of interest that a TIPS instrument pays semi-annually.
All investing involves risk, including possible loss of principal. The Fund is actively managed, and there can be no assurances that its investment objectives will be met. Derivative instruments, including swaps and swaptions, may be highly sensitive to market factors, have less liquidity than other investments and involve the potential for losses to exceed the amount invested. The use of fixed-income securities and derivatives entails interest rate and credit risks. Interest rate risk is the risk that investments will decrease in value with increases in market interest rates. Credit risk is the risk that an issuer will fail to make timely payment of interest or principal. U.S. Treasury securities are guaranteed only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. In deflationary periods, the Fund may suffer a loss.The Fund may have high portfolio turnover risk, which could increase the Fund’s transaction costs and possibly have a negative impact on performance. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. Please see the prospectus for a complete discussion of the Fund’s risks.
This information must be preceded or accompanied by a prospectus or summary prospectus. Click here to view or download a prospectus or summary prospectus. Read it carefully before you invest.
The Fund is new and has a limited operating history.
The Fund's investment sub-advisor is Ionic Capital Management LLC.
American Beacon, Ionic, Foreside and the NYSE are not affiliated.
Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is as of date indicated, and current performance may be lower or higher than the performance data quoted.
Foreside Financial Services, LLC (“Foreside”) is the distributor of the American Beacon ETFs and is not affiliated with American Beacon or its sub-advisors. American Beacon is a registered service mark of American Beacon Advisors, Inc. American Beacon Ionic Inflation Protection ETF is a service mark of American Beacon Advisors, Inc.
Returns for less than one year are cumulative and not annualized. Short-term performance, in particular, is not a good indication of the Fund’s future performance, and an investment should not be made based solely on returns. Net asset value ("NAV") returns are based on the dollar value of a single share of the Fund, calculated using the value of the underlying assets of the Fund minus its liabilities, divided by the number of shares outstanding. Market price returns are based on the official closing price on the NYSE Arca, Inc. Market price performance does not represent the returns you would have received if you traded shares at other times. Total Return reflects reinvestment of distributions on ex-date for NAV returns and payment date for market price returns. The Fund's shares are bought and sold at current market prices (and not at NAV), and market price may differ significantly from NAV during periods of market volatility.
Foreside Financial Services, LLC is the distributor of the American Beacon ETFs and is not affiliated with American Beacon or its sub-advisors. American Beacon is a registered service mark of American Beacon Advisors, Inc. American Beacon Ionic Inflation Protection ETF is a service mark of American Beacon Advisors, Inc.
Inflation Expectations Increase
Inflation Expectations Decrease
Expected Carry
Interest Rates Increase
Interest Rates Decrease
Bond Prices Increase
Bond Prices Decrease
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–
+ Indicates the potential for a positive return of the designated instrument; - Indicates a negative return of the designated instrument. Expected Carry – for the: (i) swaps, assumes realized inflation remains above the fixed leg of the swaps; (ii) swaptions, represents the decrease in value solely through the passage of time; and (iii) TIPS, assumes CPI plus real rates remains greater than zero.
Holdings are subject to change without notice. The amounts shown under Weight, Market Value and Notional Value are calculated using third-party pricing sources and do not reflect any fair valuation adjustments made by American Beacon in determining the Fund's NAV. In addition, the values shown for holdings denominated in non-U.S. currencies may have been converted to U.S. dollars using foreign exchange rates as of a different time than used for purposes of determining the NAV.
Carry: Positive carry refers to an expected return that exceeds the cost of making the investment, while negative carry means an investment is expected to cost more to own than the income it will earn.
The views expressed in the resources linked above are those of the speaker as of the date noted therein, are subject to change without notice and may not be reflective of current views held by American Beacon, its affiliates or sub-advisors.
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