ETF Database » Volatility

How Volatile Is Your Long/Short ETF?

Carolyn Pairitz — Thu, 25 Apr 2013 11:00:00 +0000

As correlations between international markets have steadily increased over the years, identifying non-correlated assets has become both increasingly important and difficult. In this environment, long/short investment strategies may be an intriguing opportunity, as they maintain the potential to generate positive returns even in the most challenging of economic climates. Investors who wish to access the long/short sector have a number of strong options available at their fingertips [Download Free Report: How To Buy The Right ETF Every Time]. Do These ETFs Perform in the Short or Long Term? The long/short strategy is certainly nothing new; investors have been utilizing market neutral tactics for decades, attempting to generate profits from relative mispricings regardless of whether bullish or bearish conditions exist. Originally employed using individual stocks, long/short strategies have become increasingly complex, and are now a staple of many hedge funds. But the marriage of long/short strategies and the ETF structure is a relatively [...]

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3 Things You Need To Know About Low Volatility ETFs

Cory Mitchell — Mon, 15 Apr 2013 13:00:45 +0000

During uncertain times, investors gravitate toward lower volatility equities and ETFs, as there is generally less risk attached to these products due to their more stable price action. But even during calm and high growth times, low volatility equities and ETFs have benefits. Growth within the ETF industry now provides investors with highly liquid vehicles for accessing a basket of low volatility equities. In good times and bad, there are several reasons to consider holding a low volatility ETF in your portfolio [see Free Member Report: How To Pick The Right ETF Every Time]. 1. Low Volatility Does NOT Always Equal Low Returns There is a common misconception that buying lower volatility equities or ETFs translates into lower returns. While there are times when low volatility may not make the high gains associated with some higher volatility stocks, a low volatility ETF can actually perform as well or better than some major [...]

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How To Hedge With ETFs

Cory Mitchell — Mon, 04 Mar 2013 14:00:39 +0000

ETFs have rightfully earned the approval of countless buy-and-hold investors as these financial vehicles have proven to be cost-efficient portfolio building blocks. With over 1,400 exchange traded products (ETPs) on the market, it’s also no surprise that more tactical investors and savvy traders have also embraced these instruments for their ease-of-use, transparency and unparalleled liquidity. As such, ETFs can do a lot more than offer diversified exposure; these funds can be effective in executing both simple and more sophisticated hedging strategies, helping to improve your portfolio’s risk-adjusted returns [see 101 ETF Lessons Every Financial Advisor Should Learn]. ETF Hedging Advantages Hedging is using one investment to help offset the risk of another. This strategy, when done properly, can greatly reduce the susceptibility to market fluctuations and adverse price moves. In order for a hedge to work, the “hedged” assets should move in different directions—when one falls the other rises—netting out [...]

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How ETF Traders Can Use The VIX Index

Cory Mitchell — Thu, 14 Feb 2013 14:00:12 +0000

Investors and traders alike have surely run across the Volatility Index, commonly referred to as the VIX, in headlines from time to time. Many are quick to overlook this valuable indicator since they may not understand how it works, or how to use it to help forecast stock prices. However, this so-called “fear index” offers insight into the direction of stock prices, both as a confirmation signal and to aid in predicting stock market turning points [Download 101 ETF Lessons Every Financial Advisor Should Learn]. What Is the VIX? The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) began trading in 1993, and is designed to measure the 30-day implied volatility of the S&P 500. The value is attained through calculations involving S&P 500 option contracts, which are bets based on the future value of the index [see How To Swing Trade ETFs]. The VIX moves inversely to the S&P 500 Index, [...]

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10 Worst-Performing ETFs In 2012

Daniela Pylypczak — Thu, 27 Dec 2012 14:00:52 +0000

While most enjoyed 2012′s rather impressive track record, other not-so-lucky investors fell pray to those corners of the market most affected by the global economic slowdown. Some of the worst performers were the usual subjects, namely volatile commodities and alternative energy equities, but others might have been somewhat surprising. From the frustrating natural gas market to investments in a popular Latin American country, we outline the ten worst-performing ETFs in 2012 (Year-to-date returns as of 12/20/2012) [see also How To Pick The Right ETF Every Time]: 1. C-Tracks ETN Citi Volatility Index Total Return (CVOL), Down 90% This year’s biggest loser was CVOL, which was able to lose almost 100%. The index this fund is designed to measure directional exposure to the implied volatility of large cap U.S. stocks, but sadly for Citigroup, U.S. stocks didn’t take any major hits this year. 2. Dow Jones-UBS Coffee ETN (JO), Down 43% This [...]

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Get Rid Of Your Emerging Market ETF Volatility Problem Once And For All

Carolyn Pairitz — Wed, 05 Dec 2012 12:00:30 +0000

Emerging markets offer the potential for stellar returns during times of prosperity, however, they can also fall victim to rampant profit-taking when global markets encounter turbulence; at the first sign of economic uncertainty, emerging markets are usually among the first to sell off as investors scale back on risk exposure. Luckily, the expansion of the ETF universe has spawned several products that make it easy for investors to tap into lucrative growth opportunities overseas without incurring more volatility than they can stomach [see 1,400+ ETFdb Realtime Ratings]. Below we outline five ETFs that will help you get rid of your emerging market ETF volatility problem once and for all: MSCI Emerging Markets Minimum Volatility Index Fund (EEMV) This ETF aims to reflect the performance characteristics of a minimum variance strategy applied to large and mid cap equities across 21 emerging-market countries. Highlighting financial services, consumer defensive and communication corporations, EEMV has [...]

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iPath to Reverse Split VXX

Carolyn Pairitz — Mon, 01 Oct 2012 12:30:13 +0000

Most VIX-focused exchange-traded products have tumbled over the course of the last several months, as surprisingly strong equity markets have led to a consistently depressed VIX. The relatively low levels of volatility, coupled with persistent and steep contango in futures markets, have pushed down most of the products in the Volatility ETFdb Category sharply on the year. Against this backdrop, iPath announced recently that it will be implementing a 1-for-4 reverse split on its volatility focused ETN VXX, which currently has over $1 billion in assets. VXX has lost about 75% of its value since the beginning of the year and has declined more than 95% over the past few years [see VXX Returns]. Barclays Bank has the right to cause a reverse split if the indicative value of the ETNs falls below $25 per share. After its recent freefall, shares of VXX are trading at less than $10; the 1-for-4 reverse split should push [...]

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Highlighting 5 Popular ETNs

Daniela Pylypczak — Mon, 09 Jul 2012 13:00:53 +0000

Under the umbrella of exchange-traded products, ETNs have attracted far less interest than their ETF cousins and now represent only a small portion of total ETP assets. Exchange-traded notes are debt instruments linked to the performance of an index, and as a result there won’t be any tracking error with these products. Although these investment vehicles expose their holders to the credit risk of the issuing institution, many offer certain tax advantages that may be appealing to many investors [see also 10 Surprising ETF Stats From Mid Year ETF Data]. As the financial world continues to embrace the exchange-traded note structure, issuers have been ramping up their line ups, contributing to the the accelerating growth of the industry. Investors distanced themselves from ETNs during the recent crisis (and rightfully so; the credit risk component no doubt gave many a bit of additional anxiety). But ETNs are becoming increasingly popular in a [...]

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5 Of The Best ETF Performers Of The First Half (Plus The 5 Worst)

Michael Johnston — Mon, 02 Jul 2012 12:00:47 +0000

The first half of 2012 is now in the books, dropping the curtain on a back-and-forth six months for many investors. Though the sentiment recently has been generally negative, the first half will close with positive year-to-date returns for many broad-based equity and bond ETFs–the result of a furious rally during the first two months of the year. As the markets have frothed back and forth during the last six months, a number of asset classes have floated to the top. On the flip side of the coin, there have already been a number of big losers so far in 2012 as well. Below, we highlight the biggest movers from the first half of the year in the ETF universe–in both directions [for more ETF insights, sign up for the free ETFdb newsletter]. Best ETF Performers The best ETF performers, excluding leveraged and inverse funds, represent relatively narrow sectors of [...]

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3 ETF Types For Downside Protection

Daniela Pylypczak — Fri, 15 Jun 2012 13:00:44 +0000

When it comes to investing, the focus is always on one simple and logical goal: maximize returns, whether in the short term or over the long haul. But as many can attest to, investing can sometimes be a crapshoot. Nearly every imaginable event or influence can send shock waves into the market, instantly producing a tangible and sometimes painful effect on bottom line returns. As we continue to keep our eye on the prize, many of us forget how important limiting downside can be [see Safe Haven ETF Portfolio For Conservative Investors -- Sneak Peek]. Besides the obvious direct benefits, downside protection strategies can help us from falling into “behavioral traps” that can significantly erode returns. At one point in time, every investor has experienced these behavioral traps: buying when we should be selling, selling when we should be buying, and continuously and illogically digging ourselves into deeper holes. But [...]

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ETF Database » Volatility

How Volatile Is Your Long/Short ETF?

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3 Things You Need To Know About Low Volatility ETFs

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How To Hedge With ETFs

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How ETF Traders Can Use The VIX Index

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10 Worst-Performing ETFs In 2012

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Get Rid Of Your Emerging Market ETF Volatility Problem Once And For All

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iPath to Reverse Split VXX

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Highlighting 5 Popular ETNs

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5 Of The Best ETF Performers Of The First Half (Plus The 5 Worst)

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3 ETF Types For Downside Protection

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