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This ETF offers investors a way to access equity market volatility, an asset class that may have appeal thanks primarily to its negative correlation to U.S. and international stocks. The VIX index tends to spike when anxiety increases, and as such often moves in the opposite direction of stocks. However, it's important to note that TVIX does not represent a spot investment in the VIX, but rather is linked to a leveraged index comprised of VIX futures. As such, the performance of this product will often vary significantly from a hypothetical investment in the VIX (which isn't possible to establish). The focus on short-dated futures increases the correlation to the VIX, but also increases the potential for the adverse impacts of contango. Longer-dated leveraged options such as TVIZ, may be appropriate for longer holding periods but will be less volatile as well. This ETN should never be held over the long term in a buy-and-hold portfolio; it is designed as a trading instrument that appeals to those looking to place a leveraged short term bet against the market or use as a hedging tool.
The adjacent table gives investors an individual Realtime Rating for TVIX 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 Leveraged 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 section compares how balanced and deep this ETF is relative to the peer group ETFdb.com Category.
This section compares the cost efficiency of this ETF to peers in the same ETFdb.com Category.
This ETF is not currently available for commission free trading on any platforms.
There are 10 other ETFs in the Leveraged Volatility ETFdb.com Category that are also eligible for commission free trading:
TVIX does not have an ESG score. There are no ESG themes that map to this ETF.
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 TVIX relative to other ETFs and benchmarks or to include indicators such as Bollinger Bands, relative strength, and moving averages.
This section shows how the dividend yield of this ETF compares to the peer group ETFdb.com Category.
This section shows how the volatility of this ETF compares to the peer group ETFdb.com Category.
Published March 1, 2016
The following article was not written by a human. It was written by an AI called Emma. Her bio can be found on her author page.
Artificial intelligence has come a long way, and while it may or may not replace humans, it is already providing exceptional support by augmenting human work in many industries. Emma collates news items and analyzes structured financial numbers as she spins out an article in 20 minutes. This is definitely an interesting milestone in AI. We’re just checking in to see if our readers like it. Do give us a shout on Twitter at @ETFdb or on Facebook.
The Credit Suisse AG VelocityShares Daily 2x VIX Short-Term ETN (TVIX ) provides 2x leveraged exposure to an index comprising first- and second-month VIX futures positions, resulting in a weighted average maturity of one month. Typically, the VIX is known as the “fear index,” allowing investors to take positions on market sentiment. Hedge funds have used the VIX to hedge risks in their portfolios, while many long-term investors use it as downside protection. This year, TVIX is in the red, significantly underperforming the S&P 500. Markets recovered with reduced volatility from January, resulting in a loss of 12% for the ETN.
The overall picture for TVIX is looking good. There are several macroeconomic headwinds—an anemic U.S. recovery, slowing demand in China, a near-negative interest rate environment in Japan and the EU, a stronger dollar, and capitulation of the debt of the companies in the energy/commodities sector—that all present downside risks to the earnings of companies present in the S&P 500. Since the VIX tracks volatility across the constituents of the S&P 500, one must also consider the fundamentals of the constituents. As early as January 2016, TVIX traded near $12.74, a sign of troubled times on the back of weak data from China and widening spreads on CDS from companies in the energy and commodities sectors.
More recently, however, as oil has rallied from the mid-20s and the capitulation in the commodities sector has ended, TVIX has lost more than 50% of its value over the last month as volatility has come down.
In terms of historical performance, the ETF has not done well as equities have rallied over the last five years. In percentage terms, TVIX is down 99.1%, and over the last one year, it is down 68.03%, despite spikes in late August and earlier this year on some of the same macroeconomic concerns.
In both late August and mid-January, the VIX spiked, almost doubling in value from $16.50 to $30, taking the TVIX from $5.50 to $19 as expected, a three-fold increase in three weeks. Remember, the TVIX moves 2x or more the movement of the VIX, so price increases and decreases of this magnitude should not be much of a surprise. As of late, equities have rallied on the back of a strong global consumer, with earnings recovering in sectors such as staples, technology and services. The energy/commodities complex too, has probably already seen the worst, and with that TVIX has cratered, falling from $12.70 in February 2016 to its current levels of $5.23.
That takes us to TVIX’s financial ratios. TVIX has just over $570 million in assets under management. The fund does not have a dividend yield as it is an uncollateralized debt instrument. TVIX is currently near its all-time lows, trading as of this writing at $5.23, with an all-time low of $4.75 reached a few trading sessions ago. Its 52-week high is $19.90, which it reached twice in early September 2015 and mid-February 2016. TVIX typically lags the performance of the VIX, both negative and positive, by a few days, and it also tends to have a very high inverse correlation to the direction of the S&P 500.
As such, downside risks are a positive for TVIX. Among the downside risks to the global economy from a monetary policy perspective are anemic consumer demand in emerging markets, rising debt in China, and a strong greenback that has hurt the earnings of even well-established U.S. companies like Apple (AAPL).
Finally, the Dow and S&P 500 are within 7% of their all-time highs, while TVIX is near an all-time low. As stated earlier, since TVIX has an inverse relationship with the stock market and tends to rise 50% or more in periods of stress to equities, I believe it’s prudent to start accumulating TVIX in order to hedge downside risk to other parts of your portfolio. Therefore, TVIX is a Buy with a price target of $7.