VMAX And VMIN Poised To Be Most Important VIX ETP Launch In Years

REX Shares is launching two new VIX exchange-traded products on Tuesday in what is likely to be the most important VIX ETP launch in several years.The REX VolMAXX Long VIX Weekly Futures Strategy ETF (VMAX) is the long volatility product, while the REX VolMAXX Inverse VIX Weekly Futures Strategy ETF (VMIN) is the short volatility sibling.

The launch of these two products comes at a time when the VIX ETP space had become stale and had frustrated investors who have sought out products for both long and short volatility strategies when Every Single VIX ETP (Long and Short) Lost Money in 2015.

After a flurry of innovation in the VIX ETP space from 2009 to 2011, new product offerings have slowed to a trickle over the course of the past few years, with only the mystifying AccuShares VXUP and VXDN products making it out of the gate last year in a highly-anticipated May 18th launch that pivoted quickly from excitement to befuddlement, as investors were overwhelmed by the complexities associated with the seemingly endless flow of regular distributions, special distributions and corrective distributions.

VIX aficionados know that 2015 was also notable in that it marked the launch by the CBOE of VIX weekly futures on July 23rd and VIX weekly options on October 8th.Both product launches were successful and it was just a matter of time before the new VIX weekly futures provided the foundation for a VIX ETP that was based on those futures.While details are sketchy regarding VMAX and VMIN, they will be holding VIX weekly futures and will target a weighted-average VIX futures maturity that is less than thirty days.These ETFs will be actively managed and it is likely that they will not have a fixed target maturity.Theoretically, the target maturity could vary anywhere from five days to 29 days, though given the holdings and the “max” and “min” embedded in the ticker symbol, I would anticipate an aggressive target maturity on the order of 7-14 calendar days.

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