Source and Nomura have today announced the launch of the Nomura Voltage Short-Term Source ETF (the “ETF”). The ETF aims to provide responsive and tactical exposure to volatility by tracking the Nomura Voltage Strategy Short-Term 30-day USD TR Index, an index which seeks to capture spikes in volatility while reducing associated slide costs. This is the second.…
Sign up for our weekly Newsletter and receive the latest ETF and ETC news.
Click here to register for your free copy
Futures on the CBOE Volatility Index (the “VIX”) are a convenient way to obtain exposure to volatility. However, because VIX futures often suffer from contango1, maintaining that exposure over the long term can be costly. The Nomura Voltage Strategy Short-Term 30-day USD TR Index offers an efficient alternative for investors seeking a long position in volatility. The index reflects exposure to volatility via the S&P 500 VIX Short-Term Futures Index TR, but varies the level of exposure from 0% to 100% based on the Nomura Voltage allocation model. In this way, the index aims to capture spikes in volatility, whilst mitigating the cost of rolling VIX futures.
Mohamed Yangui, Managing Director and Head of Equities Structuring at Nomura, commented on the high demand for this kind of product: “Although our existing medium
-term Voltage ETF is very popular as a buy-and-hold hedge, we see some clients looking for more responsive exposure, something more closely aligned to spot VIX. Short-term VIX futures are very reactive to spikes in volatility, but, over time, investors suffer as the rolling costs can be painfully high. This strategy aims to significantly reduce the impact of those costs.”
Source CEO Ted Hood added: “With the success of the existing Nomura Voltage Source ETF, we are delighted to add another Voltage product to our range. Volatility exposure is often a compromise between cost and reactivity, so it is important that investors can choose the product that best suits their needs, whether as a hedging tool or to implement a stand-alone investment. This new ETF will complement Source’s existing volatility product range, which currently represents over 70% of assets in European-listed volatility ETPs.”
| Product name | Nomura Voltage Short-Term Source ETF |
| Bloomberg Ticker | VOLS LN |
| Fund currency | USD |
| Trading currency | USD |
| Management Fee | 0.30 % per annum* |
| Listing | London Stock Exchange |
| Underlying Index Name | Nomura Voltage Strategy Short-Term 30-day USD TR |
| Underlying Index Ticker | NMEDVSU3 |
| Domicile | Ireland |
Important Information
The products described within this publication are designed for sophisticated investors only. The benchmark index is highly volatile. Investors’ capital is at risk and the amount originally invested may not be recovered.
Investors should not deal in these products unless they understand their nature and the extent of their exposure to risk. The value of these products can go down as well as up and can be subject to volatility due to factors such as price changes in the underlying instrument and interest rates. It is recommended that potential investors study the Prospectus before investing.
Source: ETFWorld – SourceETF
Subscribe to Our Newsletter
