Exchange traded products that track the CBOE Volatility Index, or VIX, have experienced large outflows, suggesting that investors are anticipating smaller swings and calmer markets ahead.
Traders pulled $850 million from two of the most popular ETPs, which include both exchange traded funds and exchange traded notes, in January, even as the VIX is set for its largest monthly surge since August, reports Camila Russo for Bloomberg.
So far this month, the iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) experienced $381.3 million in net outflows, ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY) saw $30.0 million in outflows and the leveraged ProShares Ultra VIX Short-Term Futures (NYSEArca: UVXY) had $400 million in redemptions, according to ETF.com.
VXX and VIXY jumped a little over 30% year-to-date while UVXY surged 62%, with the VIX now hovering around the 22.5 level – the VIX has historically kept within the 15 to 20 range.
The VIX is a widely observed indicator for investor sentiment in the stock market and measures the expected or implied volatility of large-cap stock options traded on the S&P 500 index. Exchange traded products that track VIX futures allow investors to profit during rising volatility or hedge against short-term turns.