Kevin O’Leary, chairman of O’Shares, has a few rules for how to invest in an environment when rates are on the rise.
"It is an ETF that's designed to have high-quality pieces of the S&P. So it's a rules-based ETF that says 'give me companies that do well in inflation that have pricing power.' So do people pay for consumable goods in inflationary times? Yes, they do. They have to eat, they've got to buy health-care products, and they have to do things they do every day even though these companies have the ability to raise prices as inflation comes in," O'Leary said.
The OUSA ETF has been caught up in the broader sell-off, though to a lesser extent. This week, for example, it has fallen 2% while the S&P 500 has dropped nearly 4%. High-quality and high-dividend stocks are important in this environment, said O'Leary, but there's one other attribute he's on the lookout for.
"I like boring – big and boring, big fat cash flows. That's what I like because at times like this when you have a portfolio of high-quality names, you reduce your volatility. That's what OUSA is designed to do," he said. Sign up for our weekly newsletter that goes beyond the livestream, offering a closer look at the trends and figures shaping the ETF market.
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