Exchange traded note issuer Barclays listed a new volatility-linked ETN this week that replaces a previous version that was redeemed due to the decline in the CBOE Volatility Index before it spiked on Eurozone debt worries.
The new iPath Long Enhanced S&P 500 VIX Mid-term Futures ETN (NYSEArca: VZZB) was launched at an initial price of $30 a share.
Earlier this month, Barclays said iPath Long Enhanced S&P 500 VIX Mid-Term Futures ETN (VZZ) traded below $10 a share, which triggered an automatic redemption. [VIX Pullback Trips ETN Redemption]
“Our leveraged and inverse ETNs are designed with a leverage factor that is locked in at the point of purchase, reflecting returns that more closely track the index without path dependency over periods longer than a single trading day,” said Johnny Wu, head of Investor Solutions, Americas at Barclays Capital.
“The launch today demonstrates our ongoing commitment to providing investors with efficient access to the U.S. volatility markets, without tracking error or resets,” Wu said.
CBOE Volatility Index
Tisha Guerrero contributed to this article.
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