Touted as the ‘Investor Fear Gauge’, the CBOE Volatility index or ‘VIX’ is now one of the most followed market indicators around the world.  This tends to outperform when markets are falling or fear levels over the future are high. The CBOE VIX determines the volatility that the equity market (i.e. S&P 500) is heading toward.

There is no doubt that the U.S. economy is well on its course of recovery, but this does not ensure that there is no volatility in the market. The economy is presently caught between mixed data points and is baffled by the rate hike speculations.

Though a June timeline (for Fed rate hike) looks almost unfeasible as indicated by the Fed’s still-cautious tone, the latest sturdy job, housing and inflation data rekindled the faster-than-expected rate hike possibility in the U.S. On the other hand, industrial production, consumer sentiment and retail sales numbers were daunting and have left the Fed in two minds about normalizing the interest rate policy.

To add to this, issues over global growth especially in the big three regions ─ Euro zone, Japan and China – will be lingering concerns as these are far from standing on their own feet. Moreover, volatility in crude prices can also single-handedly derail the course of action taken by these economies and their central banks in the coming days.

So, one can be sure that volatility will remain heightened going forward and might lead many investors to monitor volatility-related products. After all, thanks to the fast-growing ETF industry, it has become easier to invest in complicated spaces like volatility.

Elevated fear levels among investors can be well understood from the 1.02% gain (on May 28, 2015) in iPath S&P 500 VIX Short-Term Futures ETN (VXX), the most popular volatility ETN on the market. Almost all volatility ETFs has added substantial gains on that day due to sharp sell-off in Chinese stocks and the ongoing Greek debt deal negotiations.

 ProShares VIX Short-Term Futures ETF (VIXY) was up over 1.2%, VelocityShares Daily Long VIX Short-Term ETN (VIIX) was up over 1% and C-Tracks on Citi Volatility Index ETN (CVOL) added over 2.6% (see all volatility ETFs here).

While there are various products in this space, investors should note that most products revolve around futures. But AccuShares recently rolled out an ETF which tracks the 'spot' exposure to the CBOE Volatility Index. Below are two products which can be useful for investors seeking to play a volatile market:

VXX

This is the most popular volatility ETN on the market, focusing on the S&P 500 VIX Short-Term Futures Index. The index offers exposure to a daily rolling long position in the first and second month VIX futures contracts (read Why I Hate Volatility ETFs).

The note has amassed nearly $1.15 billion in AUM and charges 89 bps in fees per year from investors.

Spot CBOE VIX Up Class Shares (VXUP)

This is brand-new product and could be an interesting choice for investors. The fund looks to track the spot price volatility of the S&P 500 Index and its underlying index is the CBOE Volatility Index. It charges 95 bps in fees.

Per the issuer, “the AccuShares Spot CBOE VIX ETF holds only cash and cash equivalents, eliminating the expense and complexity typically associated with futures-based strategies, and creating an ETF that provides transparency of fees and holdings.”

Bottom Line

Investors should note that these products are strictly meant for short-term traders given that their nature of operation thrives on short-term investment strategies. Holding the product for a longer period of time would result in capital flight. After all, the U.S. economy is now one of the better-positioned developed countries and its bourses would remain more-or-less steady, going forward.