However, volatility products track VIX futures rather than the spot price.
“Sophisticated investors with long-term outlooks could use this fund to partially hedge their portfolios against future downturns but must first understand the unusual mechanics of this exotic vehicle,” writes Morningstar analyst Abraham Bailin in a profile of S&P 500 VIX Short-Term Futures ETN.
The note was down 21.9% in the first quarter, according to Morningstar. The ETN traded lower Friday as an ETF tracking the Dow Jones Industrial Average rallied to a 52-week high. [Dow ETF At Recovery High As Emerging Markets Jump.]
