Canadian ETF knowledgebase
The fund is designed to provide investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to the inverse (opposite) of the daily performance of the S&P 500 VIX () Short-Term Futures Index.
Any U.S. dollar gains or losses as a result of the ETF's investment will be hedged back to the Canadian dollar to the best of its ability.
Volatility is a market condition that is easier to identify than it is to manage. Since 1993, the CBOE has calculated and published its proprietary measurement of implied and expected volatility of the S&P 500 over a 30 day period, the CBOE Volatility Index (the "VIX Index").
The S&P 500 VIX Short-Term Futures Index, the underlying index, seeks to offer exposure to market volatility through publicly traded futures markets. Specifically, the Underlying Index measures the excess return from a daily rolling long position in the first and second month VIX Futures Contracts.
VIX Futures Contracts are based on the value of the VIX Index at a predetermined future date. The VIX Index is calculated based on the prices of put and call options on the S&P 500.
The VIX Index is a theoretical calculation and cannot be traded on a market price basis.
While it is important to understand the VIX Index and VIX Futures Contracts in order to understand the composition of the Underlying Index, neither the VIX Index nor individual VIX Futures Contracts are the benchmark or underlying index for this ETF.
Historically, the Underlying Index has tended to revert to a historical mean. As a result, the performance of the Underlying Index is expected to be negative over the longer term.
The Fund utilizes a Forward Agreement structure to gain exposure to the target portfolio.
Be aware that the forward structure adds additional costs to the ETF. These costs are not included in the MER.
|Category (main)||Inverse Volatility USA|
|Underlying Index||S&P 500 VIX Short-Term Futures Index|
|ETF Structure||Passive type. Inverse. Endeavours to return the inverse (opposite) daily Index return before fees/costs|
|Issuer||Horizons ETFs (Canada)|
|ETF Home Page||Available here|
|Inception Date||April 4, 2012|
|Significant Currency Exposure||Yes|
|Management Expense Ratio (MER)||Unknown *|
|Forward Structure Costs||0.50%|
* Not available yet
|Exchange||TSX (Toronto Stock Exchange)|
|Eligibility *||RRSP, RRIF, RESP, TFSA, DPSP, RDSP|
|DRIP available **||No|
|PACC Plan available **||No|
|SWP available **||No|
* Always check eligibility with your plan operator as plans and accounts can differ
** Not all brokers can facilitate these plans. Check with your broker.
To view the TSX or Morningstar fund page for this ETF click on the Fund Data menu tab or below:
Inverse ETFs are reset/rebalanced daily. Consequently they will not and should not be expected to replicate the return (or inverse return) of its underlying index over any period of time other than daily.
The returns of inverse ETFs over periods longer than one day will likely differ in amount and possibly direction from the performance of their underlying index for the same period. This effect becomes more pronounced as the volatility of the underlying index increases.
Investors should monitor investments in inverse ETFs on a daily basis.
When inverse ETFs are held, they are typically held for small periods only - often just a single day.
Do not invest in inverse ETFs unless you fully understand the risks involved and how your particular ETF works.
Historically, the Underlying Index (S&P 500 VIX Short-Term Futures Index) has tended to revert to a historical mean. As a result, the performance of the Underlying Index is expected to be negative over the longer term.