The top performing exchange traded products of the year include an exchange traded note that capitalizes on contango in VIX futures and a number of growth-heavy technology exchange traded funds.
The VelocityShares VIX Short Volatility Hedged ETN (NYSEArca: XIVH) is the best performing non-leveraged ETP year-to-date, rising 50.6%, according to XTF data.
The VelocityShares VIX Short Volatility-Hedged strategy utilizes a systematic approach to investing in VIX futures that has a net long or net short volatility position that varies due to daily changes in the volatility market. Specifically, the ETN has a -70% target net volatility allocation.
XIVH’s bearish take on VIX futures also benefits from contango in the VIX futures market. Funds will typically roll futures before a contract matures, typically selling low and buying a later-dated futures contract at a higher price, which may cause the funds to lose money over time. However, the short trade has helped XIVH capitalize on the negative roll in a contangoed market.
The ARK Web x.0 ETF (NYSEArca: ARKW) was the second best performer this year, gaining 46.7% year-to-date.