iPath Adds Another Volatility ETN to Lineup
Michael Johnston submits:iPath has launched another exchange-traded note offering inverse exposure to an index comprised of VIX-related futures contracts, rolling out the January 2021 Inverse S&P 500 VIX Short-Term Futures ETN (IVO). The new product is substantially similar to the Inverse S&P 500 VIX Short-Term Futures ETN (XXV) that launched in July of last year. Both ETNs are linked to the inverse performance of the S&P 500 VIX Short-Term Futures Index Excess Return. That benchmark offers exposure to a daily rolling long position in the first and second month VIX Index futures contracts, rolling exposure to the underlying futures contracts continuously throughout each month and targeting a constant weighted average maturity of one month. In addition to a different inception date, IVO will be different from the existing iPath product in terms of maturity date and final valuation date. A Barclays press release noted that “the two series of ETNs are not fungible with one another.” The two series of ETNs will also maintain different “participation values,” which the prospectus notes is intended to approximate the ratio of (1) the value of the notional exposure per ETN of a series to the performance of the Index relative to (2) the value of each ETN of that series.Complete Story »
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