ProShares Plans Cheaper VIX ETFs

November 10, 2010

ProShares, the world’s biggest purveyor of indexed and leveraged exchange-traded products, filed paperwork with the Securities and Exchange Commission to offer two ETFs based on VIX volatility futures that will be cheaper than competing products from Barclays, the dominant firm in the space.

The ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY) and the ProShares VIX Mid-Term Futures ETF (NYSEArca: VIXM) will each cost investors 0.85 percent a year, 10 basis points cheaper than the 0.95 percent Barclays charges on its VIX-related exchange-traded notes.

ETPs based on VIX futures have grown in popularity since Barclays began carving out the space in January—about the time financial markets were roiled by Greece’s sovereign debt crisis. VIX products allow investors to profit from rising volatility, and an inverse ETN Barclays launched even allows investors to profit from declining volatility. Barclays has a total of four VIX ETNs.

ProShares didn’t say in the filing, dated Nov. 5, when it would roll out its two VIX products.


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