Nouriel Roubini, the economist known for his bearish predictions before the 2008 financial crisis, is now venturing into the world of exchange-traded funds.
What Happened: Roubini is looking to launch the Atlas America Fund, an actively managed ETF that would invest in various assets, including U.S. government, corporate, and municipal bonds, real estate, equities, and gold, reported Bloomberg.
The fund aims to generate stable returns with low volatility and limited correlation with broader equity markets, protecting against downside risks during periods of financial market stress.
Roubini, who runs Roubini Macro Associates, is among a growing number of prominent economists and investors who have attached their names to ETFs. This includes Tom Lee of Fundstrat, Katie Stockton of Fairlead, and Jim Bianco of Bianco Research.
“ETFs are the present and future of asset management, so all kinds of market participants — whether tested or untested — are gravitating toward the wrapper to attempt to expand their investor base and revenues,” said Todd Sohn, an ETF strategist at Strategas.
Despite the increasing interest in ETFs, Sohn noted that “success is not guaranteed — ETF success is earned, not given.”
Why It Matters: Roubini, often referred to as “Dr. Doom,” gained notoriety for his predictions of the housing bubble that led to the 2008 financial crisis. He has since remained skeptical of the prolonged rise in U.S. stocks and has frequently questioned the health of the U.S. economy.
Recently, Roubini co-authored a paper in which he accused the U.S. Treasury of manipulating debt issuance to lower real borrowing costs across the economy, a claim that was firmly rejected by U.S. Treasury Secretary Janet Yellen.
Aside from his work at Roubini Macro Associates, Roubini is also the co-founder of Atlas Capital Team, where he is involved in developing investment strategies to protect against high-risk regimes, including out-of-control inflation, climate change, and civil unrest.
Despite his controversial views, Roubini’s investment strategies have been gaining traction. His firm’s leadership team includes individuals with previous experience at the International Monetary Fund, the World Bank, Goldman Sachs Group Inc., Binance, and BlackRock Inc.
In an interview in March, Roubini expressed concerns about a potential “no landing” scenario for the U.S. economy, which could lead to continued growth and significant market risks. He suggested that “good news on growth may be bad news for the market” if it means the Federal Reserve might not cut interest rates as expected.
Additionally, Roubini has been vocal about the potential economic disruptions that could arise from a second term for former President Donald Trump. He warned that Trump’s protectionist trade policies could lead to a trade war with American allies, resulting in de-dollarization and supply chain disruptions.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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