Horizons ETFs, a Canada-based ETF provider, has announced the launch of the Horizons BetaPro S&P 500 VIX Short-Term Futures Inverse ETF (HVI), the first Toronto-listed ETF that offers investors the opportunity to profit from a decline in volatility.
HVI is designed to provide daily investment results that correspond to the single inverse of the daily performance of the S&P 500 VIX Short-Term Futures Index (S&P VIX S-T Index).
The S&P VIX S-T Index is a short-term volatility index that is comprised of first and second month futures contracts based on the CBOE Volatility Index (VIX). The VIX is a measure of the US equity market’s implied volatility.
“Many investors may only think about investing in volatility when they expect it to rise,” said Howard Atkinson, CEO of Horizons ETFs. “Historically, volatility tends to rise dramatically over short periods of time and then taper off. Investors can potentially benefit from investing in declining volatility when the S&P 500 VIX Short-Term Futures Index has been trading above its historical range and starts to decline.”
HVI joins two existing volatility index ETFs already offered by Horizons ETF. These are the single exposure Horizons BetaPro S&P 500 VIX Short-Term Futures ETF (HUV) and the two-times leveraged exposure Horizons BetaPro S&P 500 VIX Short-Term Futures Bull Plus ETF (HVU).
“We are really happy to be able to round out our suite of volatility index ETFs with an inverse ETF,” said Atkinson. “HVI fits with our goal of being able to provide investment solutions for all market conditions, so no matter which way investors think volatility is heading, we have a volatility index ETF that they could use to potentially profit in, or protect, their portfolio.”
HVI is best suited for use in short-term speculation, portfolio diversification or as a partial hedge against market conditions; it is unlikely to be considered a standalone long-term investment.
The fund has an annual management fee of 1.15%.