ETF: The majority of the fund’s assets are VIX futures contracts that call for a future cash settlement. Investors buy VIX futures if they belive the S&P 500 will become more volatile and sell if they believe the S&P 500 will become smooth. The ETF is intended for use as a short-term investment, or for investment diversification, but not as a long-term investment.
Index: The VIX futures short term index (Bloomberg SPVXSPID:IN) measures the rolling position of first & second month VIX futures contracts. The VIX futures Index is not identical to the well known “VIX”.
CAUTION: The VIX is not the fund’s underlying index. Don’t expect the fund to track either the VIX or the volatility of the S&P 500.
Investment Strategy: Management’s propietary model determines the trades needed to achieve daily returns that match the performance of the index.
The following tables describe the fund and its primary risk-benefit. References to the data are provided at the end of this article.
Copyright © 2012 Douglas R. Knight
1. ETF snapshot in XTF.com
2. ETF snapshot and SEC filings in Morningstar.com
3. Explanation of ETF scorecard with references