 The
iPath S&P 500 VIX Short-Term Futures ETN is an exchange-traded note
that seeks to track the performance of the S&P 500 VIX Short-Term
Futures Index, which measures the returns of a portfolio of monthly
VIX futures contracts with a maturity of one month. The ETN is issued
by Barclays Bank and is designed to provide investors with exposure to
changes in the expected volatility of the S&P 500 Index.
As of
September 2021, the VXX ETN had a market cap of approximately $912
million. It should be noted that, unlike traditional ETFs, ETNs do not
hold a basket of underlying assets but instead represent a promise by
the issuer to pay the index return, less any fees, at maturity or upon
redemption.
The VXX ETN is designed to provide investors with a
way to potentially benefit from increases in market volatility, which
can occur during times of uncertainty or market stress. However,
investors should be aware that investing in VIX futures carries its
own set of risks, including the risk of loss due to the contango
effect and the impact of time decay.
The expense ratio for the
VXX ETN is 0.89%, which is relatively high compared to the expense
ratios of other exchange-traded products. This may make the VXX ETN a
less attractive option for investors seeking exposure to changes in
the expected volatility of the S&P 500 Index.
Overall, the
iPath S&P 500 VIX Short-Term Futures ETN may be a suitable investment
for investors seeking exposure to changes in the expected volatility
of the S&P 500 Index. However, as with any investment, it is important
to conduct your own research and consider your investment goals and
risk tolerance before investing in the ETN.
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