This article was written by Paul Weisbruch, the VP of ETF/Options Sales and Trading at Street One Financial.
An interesting dynamic shift has occurred in the VIX (CBOE Volatility Index) since the early August equity market meltdown, where the VIX futures curve itself moved from a prolonged period of contango to backwardation. For years, Volatility/VIX related ETFs and ETNs were much maligned in the media and by advisory and institutional firms alike as far as their ability or lack of to track spot VIX themselves. However, if an investor carefully reads the product prospectuses they will note that none of the VIX related ETF/ETN products on the market currently are designed to track spot VIX. This said, utilizing the products effectively as plays on volatility as well as volatility hedges requires not only a comprehensive understanding of how each individual fund is designed, but also a thorough scope of the current VIX futures/market environment in terms of the potential effects of contango or backwardation. [click to continue…]
Friday saw the unthinkable happen; a downgrade of U.S. debt by Standard and Poor’s, who then went on to downgrade Fannie Mae and Freddie Mac, shattering markets in the process. But now that the decision is in, and there is no looking back, many have fought over whether or not S&P made the right move, [...]
Innovation not only in the ETF space but throughout the financial industry has opened up new opportunities in recent years, allowing investors to access asset classes and strategies that had previously been out of reach. One example of such a phenomenon is the volatility space, which has been transformed from a hypothetical but widely-followed measure [...]
Last year was a good year for most asset classes, as investor portfolios continued to recover from the recent recession. The difference in performance between many comparable funds was significant, and many of the best performers of 2010 are relatively small funds that maintain considerably smaller asset bases than their more popular competitors. Below, we [...]
In general, 2010 has been a pretty solid year for most portfolios. Despite lingering concerns about unemployment and mounting debt burdens, most global equity markets have moved higher on the year. Commodity markets have been red hot, with prices of many natural resources climbing to new highs thanks to strong demand from emerging markets and [...]
The impressive ETF boom that has unfolded over the last several years has been the result of a number of attractive features of the exchange-traded structure relative to traditional mutual funds. In addition to considerably lower expenses, intraday liquidity and enticing tax breaks have fueled interest in ETPs, which now number nearly 1,100 in the [...]
VelocityShares, a newcomer to the ETF industry, is planning to jump into the world of volatility exchange-traded notes, recently detailing six new ETNs designed primarily for short-term sophisticated investors. The notes, which will be issued by Credit Suisse, will include 1x, -1x, and 2x versions linked to both the S&P 500 VIX Short-Term Futures Index [...]
Less than a week into November, the month is shaping up to be one of the most active in recent memory for the ETF industry. Vanguard (international real estate ETF), UBS (another MLP ETN), PIMCO (laddered Treasury fund), and Global X (Gold Explorers) have already launched new ETFs, and several more issuers are expected to [...]
Although there are now nearly 1,100 exchange-traded products available to U.S. investors, the universe of ETFs utilized by most long-term buy-and-holders is considerably smaller. Beyond the “plain vanilla” portfolio building block ETFs, recent years have seen the introduction of hundreds of more targeted and complex ETPs that offer exposure to exotic asset classes and regions [...]
Barclays Capital announced the latest addition to its ETN product lineup this week, launching the first exchange-traded product designed to offer inverse exposure to the primary measure of equity market volatility. The Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN (XXV) is linked to the inverse performance of the S&P 500 VIX Short-Term Futures [...]
The latest industry figures from the National Stock Exchange are out, and despite a challenging market environment, ETFs keep rolling along. Total ETF assets fell during May from $846.7 billion to $798.0 billion, a decline of almost 6%. But that plunge was attributable primarily to declining asset values, which were partially offset by continued inflows [...]
