Exchange-traded product provider Source has launched a volatility-linked ETF tracking the S&P 500 Vix Short-Term Futures Total Return index on the London Stock Exchange.
Source says the fund, which has a 0.60% total expense ratio per annum, has been released as a tool to help manage exposure to implied volatility, following the recent spikes in market volatility around the Greek crisis.
The Vix volatility index is a widely used measure of implied volatility and is regarded as a barometer for market uncertainty.
Yet Source says Vix is not easily investable. Consequently, the ETF tracks the Vix futures index, which reflects the return from rolling short-term Vix futures contracts.
The firm adds until now, European investors have been limited to trading individual Vix futures contracts, or using structured notes.
The latest ETF is Ucits III compliant and trades in US dollars. Source worked in conjunction with its partner Nomura to create the fund.
Source has 77 products covering equities and commodities, which have gathered over six billion dollars since launch in April last year.
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