Analysis: Out Of Control? Volatility ETN Triggers Risk Concerns

By
Devon Layne
February 24, 2012
Share:

Trading volume rocketed over the past two weeks for VIX-tracking futures exchange-traded products and highlight problems complex exchanged traded products can fall victim to, according to an article on Reuters.

The article highlights the recent halting of creations on the VelocityShares Daily 2x VIX Short-Term ETN (NYSEArca: TVIX). The ETN's issuer, Credit Suisse, feared increased demand would negatively affect the price of VIX futures, the article said.

The situation with TVIX is reminiscent of what happened to the United States Natural Gas Fund (NYSEArca: UNG) in 2009. UNG stopped issuing new shares then, afraid of the effect the ETF could might have on the commodity, Reuters said in the article.

For more information, go to Reuters.com.

ETF DAILY DATA

International equity funds like 'HEDJ' and 'EFAV' added assets on Thursday, Jan. 29, as total U.S.-listed ETF assets rose above $2 trillion.

'SPY,' 'XLF,' 'XLI' and 'BIL' paced SSgA's issuer-leading outflows on Thursday Jan. 29, as total U.S.-listed ETF assets rose above $2 trillion.

ETF.COM ANALYST BLOGS

By Dave Nadig

The world’s biggest ETF conference made a number of important things amply clear.

By Dave Nadig

Sometimes it’s what’s under the hood that matters. Sometimes it’s not.

By Dave Nadig

President Obama may be undermining the benefits of tax-loss harvesting.

By Scott Burley

Wouldn’t it be nice to know if your favorite ETF were part of a securities-lending program?