Barclays Replacing Maturing ETNs

VIX-linked products will see launch of their own clones in the coming weeks.
Reviewed by: Staff
Edited by: Staff

Barclays has filed for two ETNs that will replace two of its existing ETNs that are set to mature Jan. 30, 2019. The pair of “Series B” ETNs will launch in the early part of this year, though Barclays’ press release did not give a specific date.

The iPath Series B S&P 500 VIX Short-Term Futures ETNs (VXXB) and the iPath Series B S&P 500 VIX Mid-Term Futures ETNs (VXZB) will provide a way for existing investors in the iPath S&P 500 VIX Short-Term Futures ETN (VXX) and the iPath S&P 500 VIX Mid-Term Futures ETN (VXZ) to transition out of the maturing vehicles fairly seamlessly. The new ETNs have the same investment objectives and even the same investor fees of 0.89%. Like their predecessors, the new products will list on the NYSE Arca.

The short-term products are tied to an index of Cboe Volatility Index futures contracts with one month to maturity. The midterm products track an index covering contracts with five months to maturity.

The issuer is taking steps to make it easier for investors in the original ETNs to transition to the new versions. It has lowered the minimum early redemption size to 25,000 shares as long as the investor is plowing the same amount of assets into the new versions simultaneously. Typical redemption sizes for ETNs range from 20,000 to 50,000 shares.

It should be noted that both of the ETNs have been on a general downward trend practically since their respective inceptions in January 2009.

The Barclays press release did not specify when the new products will launch.

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