ETF Trends
ETF Trends

Jefferies Asset Management, which is primarily known for their new commodity exchange traded fund (ETF) line, is now planning to launch an ETF that would invest in VIX volatility futures.

The VIX is the fear index that estimates how much volatility may be present in the markets over the next 30 days. It’s commonly known as the “fear gauge” of the U.S. equities market. The VIX historically goes up when the S&P 500 falls, and vice versa. It also has a tendency to increase when uncertainty plagues the markets.

Oliver Ludwig for Index Universe reports that the fund will take long positions in futures contracts underlying the VIX Futures Index, and aims to track changes, whether positive or negative, in the level of the VIX Futures Index over time. [Placing Bets on Volatility.]

The Jefferies S&P 500 VIX Short-Term Futures ETF (NYSE: VIXX) will not outperform the futures index. VIXX could potentially be the first ETF to track VIX futures, but it’s not the first exchange traded product to do so. iSharesiPath has two exchange traded notes (ETNs): iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX) and iPath S&P 500 VIX Mid-Term Futures ETN (NYSEArca: VXZ) that track the futures and invest in different parts of the curve. [More About the iPath ETNs.]

For more stories about VIX, visit our VIX category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.