Alternative ETFs: Short Volatility Outperforms, But Investors Buy the Long Vol Dip

Share

Weekly Channel Summary

The Alternative ETF channel, currently comprising 46 funds across 28 issuers, manages a total of $9.9 billion in assets. For the week ending December 26, 2025, the channel saw essentially flat net activity with modest inflows of $7 million. This quiet week caps a robust year, with year-to-date inflows standing at $4.1 billion and 1-year flows reaching $4.14 billion. While volume was light this week compared to the 30-day inflow figure of $476 million, the channel continues to maintain the substantial capital gathered earlier in the year.

This Week’s Performance Leaders and Laggards

Performance this week was defined by the sharp divergence between volatility strategies. “Volatility – Short” funds capitalized on market conditions, gaining 1.28%, while their counterparts in “Volatility – Long” struggled, dropping -2.88% for the week. This inverse relationship highlights the difficult year for long volatility strategies, which are now down -37.94% YTD, compared to a flat -0.72% for short volatility. Among the Absolute Return categories, “Managed Futures” took the lead, delivering a solid 1.42% weekly return, outpacing “Multi-Strategy” (+1.17%) and the muted “Event Driven” category (+0.03%).

Absolute Return Category Performance

Category WTD 1 Month 3 Month 6 Month YTD 1 Year
Absolute Return – Managed Futures 1.42% 3.20% 5.22% 11.22% 6.67% 6.24%
Absolute Return – Multi-Strategy 1.17% 0.17% 0.54% 2.88% 3.51% 2.92%
Absolute Return – Event Driven 0.03% 0.22% 1.79% 3.82% 8.93% 9.08%

Volatility Category Performance

Category WTD 1 Month 3 Month 6 Month YTD 1 Year
Alternative: Volatility – Short 1.28% 8.84% 6.24% 23.99% -0.72% -4.85%
Alternative: Volatility – Long -2.88% -18.01% -18.94% -40.29% -37.94% -34.18%

Top & Bottom 5 ETFs by Weekly Performance

The week’s top performer was the AHLT (American Beacon AHL Trend ETF), which gained 3.48%, reflecting the strength of managed futures strategies this week. Conversely, the bottom of the table was populated by long volatility funds, which were hammered by market movements. The worst performers were the UVIX (2x Long VIX Futures ETF), down -6.58%, and the UVXY (ProShares Ultra VIX Short-Term Futures ETF), which fell -4.73%.

Top Performers
Ticker Fund Name WTD Performance
AHLT American Beacon AHL Trend ETF 3.48%
HFMF Unlimited HFMF Managed Futures ETF 3.16%
SVIX -1x Short VIX Futures ETF 3.13%
ASGM Virtus AlphaSimplex Global Macro ETF 2.59%
QIS Simplify Multi-QIS Alternative ETF 2.57%
Bottom Performers
UVIX 2x Long VIX Futures ETF -6.58%
UVXY ProShares Ultra VIX Short-Term Futures ETF -4.73%
VIXY ProShares VIX Short-Term Futures ETF -3.13%
VXX iPath Series B S&P 500 VIX Short-Term Futures ETN -3.10%
SPCZ RiverNorth Enhanced Pre-Merger SPAC ETF -0.16%

Analyzing the Weekly Flows

With a modest $7 million in total net inflows, investors showed distinct contrarian behavior this week. The “Alternative: Volatility – Long” category, despite being the worst performer (-2.88%), attracted the most capital with $68 million in inflows, suggesting investors may be positioning for a spike in volatility or hedging portfolios. Conversely, the “Absolute Return – Multi-Strategy” category saw the largest exits, shedding $59 million despite posting positive returns for the week. This looks like potential profit-taking or reallocation. The “Absolute Return” categories were mixed overall; while Multi-Strategy and Managed Futures saw outflows, Event Driven funds managed to pull in $22 million.

Absolute Return Category Flows

Category Fund Count AUM 5 Day 30 Day 90 Day YTD 1 Year
Absolute Return – Event Driven 9 $0.5B $22M $26M $39M $14M $14M
Absolute Return – Managed Futures 15 $4.7B ($7M) $228M $674M $1,946M $1,952M
Absolute Return – Multi-Strategy 11 $1.8B ($59M) ($45M) $201M $253M $261M

Volatility Category Flows

Category Fund Count AUM 5 Day 30 Day 90 Day YTD 1 Year
Alternative: Volatility – Long 6 $1.7B $68M $366M ($411M) $2,411M $2,480M
Alternative: Volatility – Short 5 $1.3B ($19M) ($98M) ($81M) ($526M) ($566M)

Top & Bottom 5 ETFs by 5-Day Flow

Leading the inflows was the VXX (iPath Series B S&P 500 VIX Short-Term Futures ETN), which gathered $51 million, representing 8.67% of its AUM in just five days. This aligns with the broader move into long volatility. On the outflows side, the QAI (NYLI Hedge Multi-Strategy Tracker ETF) saw the heaviest selling, losing $61 million. It was followed by CTA (Simplify Managed Futures Strategy ETF), which shed $18 million for the week.

Inflows
Ticker Fund Name 5-Day Flow
VXX iPath Series B S&P 500 VIX Short-Term Futures ETN $51M
MRGR ProShares Merger ETF $17M
DBMF IMGP DBi Managed Futures Strategy ETF $13M
UVXY ProShares Ultra VIX Short-Term Futures ETF $13M
UVIX 2x Long VIX Futures ETF $6M
Outflows
QAI NYLI Hedge Multi-Strategy Tracker ETF ($61M)
CTA Simplify Managed Futures Strategy ETF ($18M)
SVIX -1x Short VIX Futures ETF ($12M)
SVOL Simplify Volatility Premium ETF ($6M)
WTMF WisdomTree Managed Futures Strategy Fund ($4M)

Issuer League Table Update

In the issuer landscape, IM holds the top spot with 21.26% market share and $2.11 billion in AUM, followed closely by Simplify with 19.03%. In terms of flows, iPath emerged as the clear winner this week, gathering $51 million driven by interest in its volatility products. Conversely, New York Life Investments faced the largest headwinds, seeing outflows of $56 million, primarily due to the exits from its QAI fund.

Top 5 Issuers by AUM

Brand Fund Count AUM AUM Market Share
IM 1 $2.11B 21.26%
Simplify 3 $1.89B 19.03%
New York Life Investments 2 $1.05B 10.57%
ProShares 6 $0.98B 9.91%
iPath 2 $0.67B 6.80%

Top & Bottom 3 Issuers by 5-Day Flow

Inflows
Brand 5-Day Flow
iPath $51M
ProShares $28M
IM $13M
Outflows
New York Life Investments ($56M)
Simplify ($25M)
Volatility Shares ($6M)

For a deeper dive into these trends, access our FREE, in-depth Thematic ETF reports in the right side panel of this page.

Disclosures

This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.

This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.