First Trust announced this week the launch of a new ETF that will combine exposure to one of the world’s most widely-followed stock market indexes with VIX call options. The new First Trust CBOE S&P 500 VIX Tail Hedge Fund (VIXH) will seek to replicate an index that includes each component of the S&P 500 along with a variable percentage allocated to a long position in a call option on the CBOE Volatility Index (better known as the “VIX”), a unique combination that should allow it to limit downside loss potential while still offering considerable upside. The underlying index is reconstituted every month [see complete listing of new ETFs]. Mitigating Risk The idea behind VIXH is relatively straightforward; it provides investors with exposure to a core asset class while also providing downside protection that may limit losses in the event of steep declines in equity markets. Because the VIX tends [...] Click here to read the original article on ETFdb.com. Related Posts: Closer Look At S&P 500 ETF Options The Most Successful ETFs Of All-Time PowerShares Debuts High Beta, Low Volatility ETFs ETF Pop Quiz: Emerging Markets, Junk Bonds, And Spain 101 ETF Lessons Every Financial Advisor Should Learn
First Trust announced this week the launch of a new ETF that will combine exposure to one of the world’s most widely-followed stock market indexes with VIX call options. The new First Trust CBOE S&P 500 VIX Tail Hedge Fund (VIXH) will seek to replicate an index that includes each component of the S&P 500 along with a variable percentage allocated to a long position in a call option on the CBOE Volatility Index (better known as the “VIX”), a unique combination that should allow it to limit downside loss potential while still offering considerable upside. The underlying index is reconstituted every month [see complete listing of new ETFs]. Mitigating Risk The idea behind VIXH is relatively straightforward; it provides investors with exposure to a core asset class while also providing downside protection that may limit losses in the event of steep declines in equity markets. Because the VIX tends [...]
Click here to read the original article on ETFdb.com.
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