As the Federal Reserve continues to move interest rates higher, investor concerns around the market impact continue to make headline news. The question arises, do rising interest rates produce negative stock market returns? While rising interest rates could certainly give way to higher volatility in 2022, history tells us rising interest rates do not necessarily lead to a stock market decline. In fact, the opposite has been true! History shows us that the past 13 periods of Federal Reserve rate increases have produced positive market returns 11 times.
|
Fed Raising Rates |
Change in Fed Funds Rate over the period |
S&P 500 Index Price Change over the period |
|
July 1954 to October 1957 |
2.7% |
+33% |
|
May 1958 to November 1959 |
3.4% |
+32% |
|
July 1961 to November 1966 |
4.6% |
+21% |
|
May 1967 to September 1969 |
5.2% |
+5% |
|
March 1971 to September 1971 |
1.8% |
-2% |
|
February 1972 to July 1974 |
9.6% |
-26% |
|
January 1977 to July 1981 |
14.4% |
+28% |
|
February 1983 to August 1984 |
3.0% |
+13% |
|
March 1988 to March 1989 |
3.3% |
+14% |
|
December 1993 to April 1995 |
3.1% |
+10% |
|
January 1999 to June 2000 |
1.9% |
+14% |
|
June 2004 to July 2006 |
4.2% |
+12% |
|
November 2015 to January 2019 |
2.3% |
+30% |
|
Past performance is no guarantee of future results. Source: Federal Reserve |
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1 Exposure to the equity indexes without an artificial cap.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in Amplify Funds statutory and summary prospectus, which may be obtained above or by calling 855-267-3837, or by visiting AmplifyETFs.com. Read the prospectus carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. The Fund’s return may not match or achieve a high degree of correlation with the return of the underlying Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index. The use of derivative instruments, such as options contracts, can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. Investing in options, including LEAP Options, and other instruments with option-type elements may increase the volatility and/or transaction expenses of the Fund.
An option may expire without value, resulting in a loss of the Fund’s initial investment and may be less liquid and more volatile than an investment in the underlying securities. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities.
The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Long-term equity anticipation securities (LEAPS) are publicly traded options contracts with expiration dates that are longer than one year.
The Standard & Poor’s 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value. The Nasdaq 100 Index includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. The MSCI EAFE Net TR Index (Europe, Australasia, Far East) is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. It is not Possible to invest directly in an index.
Amplify Investments LLC is the Investment Adviser to the Fund and Toroso Investments, LLC serves as the Investment Sub-Adviser.
Amplify ETFs are distributed by Foreside Fund Services, LLC.
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