“Each Fund tracks its Underlying Index’s changes without the need to hold any securities, commodities, futures or other financial instruments relating to its Underlying Index or the assets referenced by the Underlying Index,” according to the SEC filing. “Instead, each Fund is expressly limited to holding only: cash; bills, bonds and notes issued and guaranteed by the United States Treasury with remaining maturities of three months or less (‘eligible Treasuries’); and over-night repurchase agreements collateralized by United States Treasury securities (‘eligible repos,”’together with cash and eligible Treasuries, ‘Eligible Assets’).”
Consequently, the AccuShares ETFs will execute cash distributions and potentially paired share distributions to deliver the exposure of the underlying index.
The ETF provider is expected to come out with the CBOE VIX options first sometime in the second quarter. AccuShares has also partnered with Robert Whaley, who developed the CBOE Market Volatility Index “VIX” for the Chicago Board Options Exchange, to launch the new volatility ETFs as an more efficient alternative to other VIX futures-based options on the market.
Will the AccuShares products bring longer term positioning economics to the futures markets? We’ll keep you posted as this story develops.