VIX ETN’s Closure Accelerated

February 09, 2018

The recent spike in volatility has hit a lot of the products tied to the VIX pretty hard. That includes the VelocityShares Daily Inverse VIX Short-Term ETN (XIV), which offers inverse exposure to first- and second-month VIX futures.

The volatility jump caused the intraday indicative value of XIV to fall to 20% or less of its closing indicative value on the previous day. That triggered what Credit Suisse terms an “acceleration event,” according to the press release.

As a result, Credit Suisse plans to issue an irrevocable call notice by Feb. 15, with the actual liquidation of the ETN occurring on Feb. 21. The last day of trading is currently set for Feb. 20.

As of the end of January, XIV had $1.8 billion in assets under management. With the jump in the VIX and XIV’s closure pending, that amount is down to less than $100 million.

iShares Turns Active ETF Passive

As of Feb. 6, the iShares Edge U.S. Fixed Income Balanced Risk ETF (FIBR) transitioned from an actively managed fund to an index-based fund, adopting the Bloomberg Barclays U.S. Fixed Income Balanced Risk Index as its underlying benchmark.

FIBR has nearly $150 million in assets under management and is part of the iShares Edge family of ETFs. The move brings FIBR into alignment with the other Edge ETFs, which are all otherwise index-based, smart-beta funds.

Contact Heather Bell at [email protected]

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