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Health care costs look as if they'll climb toward the sky forever — but few economic trends ever really last forever.
Milliman has come up with a new way for advisors, retirement savers, insurers, employers and others to cope with uncertainty about health care cost inflation: two exchange-traded funds designed for the health care cost change hedging market.
One is the Milliman Healthcare Inflation Guard ETF, with the ticker symbol MHIG.
That fund seeks to generate returns comparable to the U.S. health care cost inflation rate, as measured by Milliman.
The other fund is the Milliman Healthcare Inflation Plus ETF. That fund, which has the symbol MHIP, seeks to generate returns that exceed the U.S. health care cost inflation rate.
What it means: Clients who like the idea of using ETFs as a hedging vehicle now have an alternative to trying to create a homemade hedging arrangement by cobbling together health insurance and health care services ETFs.
Milliman: Milliman is an actuarial consulting firm, meaning that it employs actuaries, or people who have taken tests to show that they understand the math needed to manage insurance and pension risk.
The firm has been helping insurance companies and other customers analyze and forecast health care cost changes since 1956.
The ETFs: The new Milliman ETFs will be actively managed.
The managers will use a combination of health-sector stocks, related stocks, U.S. Treasurys, Treasury inflation-protected securities, corporate bonds, commodities and other assets.
The net expense ratio for each fund is 0.55%.
Milliman Financial Risk Management, a Milliman affiliate, is the advisor for the ETFs, and Milliman Funds Trust, another affiliate, is the open-end management investment company supporting the effort.
The trust is organized under the laws of Delaware. Foreside Fund Services is the principal underwriter.
U.S. Bancorp Fund Services is the transfer agent and fund accounting agent, and U.S. Bank is the custodian.
Cohen & Co. of Cleveland is the independent accounting firm in charge of auditing the ETFs.
Credit: facegolf/Adobe Stock
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