An ETF issuer announced the launch of its new S&P 500 VIX Futures ETF. The fund is the first volatility-linked ETF in Europe to track the…
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S&P 500 VIX Short-Term Futures Total Return index (the «Index») and has a 0.60% per annum management fee.
Recent spikes in market volatility around the Greek crisis have accentuated risk aversion and highlighted the need to manage exposure to implied volatility. This new addition to Source’s product range offers convenient, liquid exposure via VIX futures. Source and Nomura have worked together to originate this ground breaking product. Nomura, the global investment bank, is a pioneer in creating, distributing and trading volatility products.
The CBOE Volatility Index, known as the «VIX», is the most widely used measure of implied volatility and is seen as a barometer for market uncertainty. However, the VIX is not easily investable. The S&P 500 VIX Futures Source ETF tracks the Index, an investable index that reflects the return from rolling short-term VIX futures contracts. Although the performance of the Index differs from the VIX, it has historically shown high correlation with the VIX and high negative correlation with the S&P 500 index.1
Until now, European investors have been limited to trading individual VIX futures contracts or gaining exposure via structured notes. The new S&P 500 VIX Futures Source ETF is a UCITS III compliant fund, is listed on the London Stock Exchange and trades in USD. Commenting on the launch, Ted Hood, CEO of Source said: «The past few years have taught us that sudden, large movements in the markets can never be discounted. We are delighted to be offering this tactical tool to European investors that can be used to take an outright view on implied volatility or for hedging against worst-case market scenarios.»
Mohamed Yangui, Managing Director, Head of Product Development and Structuring Group at Nomura added, «As one of Source’s strategic partners, we are confident that this new generation of UCITS compliant volatility instruments will establish itself amongst European investors as one of the preferred solutions due to its liquidity, transparency and the potential for exposure mitigation.»
PRODUCT SUMMARY:
Product Name: S&P 500 VIX Futures Source ETF
Bloomberg Ticker: VIXS LN
Fund and trading currency: USD
Management Fee: 0.60% per annum
Listing: London Stock Exchange
Underlying Index Name: S&P 500 VIX Short-Term Futures Total Return index
Underlying Index Ticker: SPVIXSTR
Domicile: Ireland
1 Past performance is no indicator of future performance.
Source: ETFWorld – Source
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