The First European Volatility ETNs

Janus Group added on to its VelocityShares exchange traded note suite with two new options to trade on volatility in European markets.

On Wednesday, Janus rolled out the VelocityShares 1X Long VSTOXX Futures ETN (BATS: EVIX), which is linked to the VSTOXX Short-Term Futures Investable Index USD, and the VelocityShares 1X Daily Inverse VSTOXX Futures ETN (BATS: EXIV), which is linked to the VSTOXX Short-Term Futures Inverse Investable Index USD. Both EVIX ans EXIV come with a 1.35% expense ratio.

EVIX and EVIX reflect indices based on VSTOXX Short-term Futures, a widely observed measure of European equity market volatility, similar to what the VIX or CBOE Volatility Index does based on U.S. equity market volatility.

Specifically, the VSTOXX Short-Term Futures Investable Index tries to reflect the performance of a long position in a portfolio of VSTOXX futures to provide exposure to constant-maturity one-month forward, one-month implied volatilities on the underlying EURO STOXX 50 Index. Due to its long exposure to VSTOXX futures, the EVIX will likely increase in value when the volatility of European equities rises and more likely decrase in value when volatility of European equities diminishes.