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This product offers inverse exposure to an index comprised of VIX futures contracts, allowing investors to profit if the widely followed measure of equity market volatility declines or if contango in VIX futures markets erodes returns to long VIX futures strategies. Given this objective, IVOP can be expected to maintain a strong correlation with the S&P 500, though this product may be considerably more volatile. IVOP might also have appeal as a way of exploiting the adverse impact of contango in VIX futures markets; when the futures curve slopes upwards, this strategy may be capable of generating positive returns even if the spot holds steady or increases. IVOP offers exposure to a relatively complex strategy; investors without a firm grasp of futures-based investment strategies or the nuances of the VIX should not invest in IVOP, and this note probably has no place in any long term, buy-and-hold portfolios. For more sophisticated investors, however, IVOP can be a very powerful tool. A few aspects of this product are particularly noteworthy. First, IVOP does not maintain a daily reset feature as some inverse ETPs do. That means that the target multiple on the underlying index is applicable only for investors who bought at inception and hold until maturity. The effective multiple realized can vary depending on the market environment, and may be significantly greater or less than -100%. Before taking a position in IVOP, be sure to consider the participation ratio (which is generally available on the issuer's Web site). For investors seeking inverse VIX exposure with a daily reset feature, XIV is probably the best option out there. It should also be noted that IVOP maintains an automatic redemption feature; if the indicative value of the note drops below $10 per share, the issuing institution will automatically redeem the notes, and investors will receive a cash payment. Additionally, consider that IVOP is an ETN; that structure means that investors are exposed to the credit risk of the issuing institution, but will avoid tracking error and trading fees that must be considered when purchasing an ETF.
The adjacent table gives investors an individual Realtime Rating for IVOP on several different metrics, including liquidity, expenses, performance, volatility, dividend, concentration of holdings in addition to an overall rating. The "A+ Metric Rated ETF" field, available to ETFdb Pro members, shows the ETF in the Inverse Volatility with the highest Metric Realtime Rating for each individual field. To view all of this data, sign up for a free 14-day trial for ETFdb Pro. To view information on how the ETFdb Realtime Ratings work, click here.View the Category Report
The following tables and charts contain in-depth metrics for this ETF and compare it to similar peer ETFs within its ETFdb.com Category.
This ETF is not currently available for commission free trading on any platforms.
There are 10 other ETFs in the Inverse Volatility ETFdb.com Category that are also eligible for commission free trading:
This section shows how this ETF has performed relative to its peer group ETFdb.com Category.
This section compares the fund flows of this ETF to peers in the same ETFdb.com Category.
The following charts can be customized to display historical performance in a number of different formats, including line charts, bar charts, and candlesticks. Time periods can be adjusted to increase or decrease the period shown, ranging from five minutes to several months.
The following chart also includes the option to compare the performance of IVOP relative to other ETFs and benchmarks or to include indicators such as Bollinger Bands, relative strength, and moving averages.
This section shows how the volatility of this ETF compares to the peer group ETFdb.com Category.
Source: LSEG Information Services (US), Inc. (“LSEG”) © LSEG 2016. All rights in the XTF data, ratings and / or underlying data contained in this communication (“the XTF information”) vest in LSEG and/or its licensors. Neither LSEG nor its licensors accept any liability arising out of the use of, reliance on or any errors or omissions in the XTF information. No further distribution of the XTF information is permitted without LSEG’s express written consent. LSEG does not promote, sponsor or endorse the content of this communication.