RE:RE:RE:RE:HVU nightmare...
Do some homework before you buy into HVU......
The
iPath® S&P 500 VIX Short-Term Futures ETN(VXX) is an exchange-traded note. Exchange-traded notes and exchange-traded funds both trade like stocks on a listed exchange. An exchange-traded fund is backed by securities or other financial assets that are held by the issuer of the fund. An exchange-traded note is actually a fixed income security that is created to track the performance of a certain strategy. A benefit of exchange-traded notes over exchange-traded funds is that there is no tracking error. The obligation of the issuer is to match the performance of a certain index. In the case of VXX the index is the
S&P 500 VIX Short-Term Futures Index Total Return which is a strategy index that maintains positions in the front two-month
CBOE Volatility Index(VIX)futures contracts. As of June 28, 2013 this index was 56.77% invested in July VIX Futures and 43.23% invested in August VIX Futures. Each day that weighting shifts a little away from July and into August.
It has already been established that VXX is an exchange-traded note with returns based on the S&P 500 VIX Short-Term Futures Index Total Return. VIX is the commonly known name and
ticker for the CBOE Volatility Index. VIX is a measure of market expectations of near term volatility conveyed by S&P 500 Index Option prices. The performance of VIX is very difficult to replicate in a portfolio for a variety of reasons.
Because of this there is not a financial derivative that perfectly replicates VIX. I am actually amazed at the frequency with which I see professionals commenting on the performance of VXX and referring to it as VIX.