The tail hedging strategy protects a portfolio from extreme market oscillations as a result of unpredictable, random and unexpected events, or so-called Black Swan events. The term was coined in a 2007 book by Nassim Nicholas Taleb published right before the financial crisis hit.
This “Black Swan” styled ETF will be competing with the First Trust CBOE S&P 500 VIX Tail Hedge Fund (NYSEArca: VIXH), which began trading on August 30. [New ‘Tail Hedge’ ETF Hunts Black Swans]
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.