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Investors Are Buying Volatility ETPs, Despite Never-Ending Losses

Tuesday, February 14, 2017 11:43
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Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out continued interest in the largest gold fund, volatility-linked ETPs seeing interest despite horrendous performance, and more.

SPDR Gold (GLD) continues to reel in new monies and lead all ETPs in terms of net inflows lately, with more than $900 million entering in recent sessions. With geopolitical turmoil at the top of every investor’s list, gold remains a popular hedge.

In other activity, we continue to see VXX and UVXY trade at new all-time lows this morning in spite of the VIX holding up above $11, and up 1.5% today. VXX still has pulled in impressive net assets year-to-date (over $230 million in), in spite of the depressing performance which has not been helped by what seems to be ever-present contango in the VIX futures market.

In other activity, even though EWC (iShares Canada) has seen net outflows recently (more than $200 million out), the fund has marched higher on and including the meeting between President Trump and Canada’s Prime Minister Justin Trudeau that occurred yesterday.

Finally, SPY February 235 calls traded yesterday in decent size ahead of this Friday’s options expiration (over 85,000 contracts). Some traders are thus hoping for some more quick upside in equities, as SPY is currently trading around the $233 mark.

The ProShares Trust Ultra VIX Short Term Futures ETF (NYSE:UVXY) was trading at $19.30 per share on Tuesday afternoon, down $1.23 (-5.99%). Year-to-date, UVXY has declined -55.89%, versus a 4.22% rise in the benchmark S&P 500 index during the same period.

UVXY currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #2 of 3 ETFs in the Leveraged Volatility ETFs category.

Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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