Nouriel Roubini, famously known as “Dr. Doom” for his prescient warnings about the 2008 global financial crisis, is taking his dire economic forecasts into the world of finance with the launch of an exchange-traded fund (ETF). The Atlas America ETF, which is set to list in the U.S. this autumn, represents Roubini’s first venture into money management at the age of 66.
Roubini, the chief economist and co-founder of Atlas Capital Team, has long been known for his pessimistic views on global markets. His new ETF aims to capitalize on these views by offering a strategy designed to protect investors from a broad range of emerging global risks. According to Roubini, these include higher inflation, the debasement of the U.S. dollar, global dedollarization, resource scarcity, climate change, pandemics, political polarization, and various geopolitical conflicts.
Roubini has expressed skepticism toward the traditional 60/40 portfolio of equities and bonds, particularly in times of economic instability. He pointed out that in 2022, both the S&P 500 and 10-year U.S. Treasuries suffered significant losses, challenging the idea that such portfolios are truly defensive. Instead, the Atlas America ETF will focus on short-term Treasuries, gold, Treasury inflation-protected securities, climate-resilient real estate investment trusts (REITs), and agricultural commodities.
The ETF is designed not just as a hedge against economic downturns but also as a public policy initiative to enhance U.S. economic stability. Roubini and his team intend to invest in rebuilding U.S. infrastructure, ensuring food security, and reshoring the production of green metals and rare earths. Roubini’s strategy also involves analyzing REITs at a hyper-local level using machine learning to assess climate risks, aiming to finance property and infrastructure development in areas least vulnerable to climate change.
Despite his focus on the U.S., Roubini believes the rest of the world faces even greater turmoil in the coming decades. His ETF, which could potentially cross-list in the Gulf and incorporate blockchain technology, may appeal to global investors seeking safety amid widespread economic uncertainty.
Kenneth Lamont, a senior fund analyst at Morningstar, acknowledged the value of Roubini’s defensive approach, noting that many investors could benefit from adding such a strategy to their portfolios. However, he also cautioned that Roubini’s persistent bearishness during one of the largest equity booms in history suggests he may not always be the best market predictor.
The Atlas America ETF will carry an annual fee of 75 basis points and will list via the Goldman Sachs ETF Accelerator, pending regulatory approval.
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