Short Vol Surges as Alternative ETFs Gather Inflows

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Weekly Channel Summary

The Alternative ETF channel, comprising 47 ETFs across 29 issuers, currently holds approximately $9.8 billion in assets under management. This week, the channel attracted $75 million in net inflows, a positive shift following a 30-day outflow trend of $269 million. Year-to-date, the channel has gathered $3.66 billion, contributing to a 1-year total flow of $3.74 billion, underscoring sustained interest in alternative strategies despite short-term fluctuations.

This Week’s Performance Leaders and Laggards

Performance this week was defined by a stark divergence in volatility strategies. “Alternative: Volatility – Short” strategies surged, posting a weighted average return of 7.73%, while “Alternative: Volatility – Long” strategies faced significant headwinds, declining -15.13%. In the Absolute Return space, “Absolute Return – Managed Futures” led the pack with a gain of 2.06%, outpacing Event Driven strategies and the slightly negative Multi-Strategy category.

Absolute Return Category Performance

Category WTD 1 Month 3 Month 6 Month YTD 1 Year
Absolute Return – Managed Futures 2.06% 1.41% 5.54% 10.39% 5.46% 6.61%
Absolute Return – Event Driven 0.17% 0.27% 2.25% 4.20% 8.98% 9.52%
Absolute Return – Multi-Strategy -0.20% -1.63% 1.05% 4.68% 2.28% 1.03%

Volatility Category Performance

Category WTD 1 Month 3 Month 6 Month YTD 1 Year
Alternative: Volatility – Short 7.73% 1.58% 3.82% 21.36% -8.39% -14.69%
Alternative: Volatility – Long -15.13% -5.78% -13.61% -36.73% -29.09% -24.42%

Top & Bottom 5 ETFs by Weekly Performance

The top performer for the week was the SVIX, a short volatility fund, which rallied 15.43%. Conversely, the two worst performers were leveraged long volatility funds, UVIX and UVXY, which fell -27.10% and -20.96% respectively, highlighting the difficulty of maintaining long volatility exposure in the current market environment.

Top Performers
Ticker Fund Name WTD Performance
SVIX -1x Short VIX Futures ETF 15.43%
SVXY ProShares Short VIX Short-Term Futures ETF 7.77%
ZVOL Volatility Premium Plus ETF 6.23%
SVOL Simplify Volatility Premium ETF 5.93%
TFPN Blueprint Chesapeake Multi-Asset Trend ETF 4.48%
Bottom Performers
UVIX 2x Long VIX Futures ETF -27.10%
UVXY ProShares Ultra VIX Short-Term Futures ETF -20.96%
VIXI Defiance Enhanced Long Vol ETF -17.45%
VIXY ProShares VIX Short-Term Futures ETF -14.30%
VXX iPath Series B S&P 500 VIX Short-Term Futures ETN -14.28%

Analyzing the Weekly Flows

Total net flows for the week reached $75 million. Investors showed a strong preference for “Alternative: Volatility – Short” strategies, which gathered $42 million, likely chasing the strong recent performance. Notably, the “Alternative: Volatility – Long” category also saw inflows of $25 million, which appears to be a contrarian trade given the category’s sharp decline. “Absolute Return – Multi-Strategy” funds saw the largest outflows at $13 million, suggesting some profit-taking or reallocation, while “Absolute Return – Managed Futures” continued to see steady inflows of $20 million.

Absolute Return Category Flows

Category Fund Count AUM 5 Day 30 Day 90 Day YTD 1 Year
Absolute Return – Managed Futures 15 $4.4B $20M $146M $516M $1,718M $1,973M
Absolute Return – Event Driven 9 $0.5B $0M $11M $7M ($12M) ($11M)
Absolute Return – Multi-Strategy 11 $1.9B ($13M) $6M $288M $295M $449M

Volatility Category Flows

Category Fund Count AUM 5 Day 30 Day 90 Day YTD 1 Year
Alternative: Volatility – Short 5 $1.3B $42M ($9M) ($70M) ($449M) ($431M)
Alternative: Volatility – Long 7 $1.9B $25M ($424M) ($345M) $2,106M $1,757M

Top & Bottom 5 ETFs by 5-Day Flow

The top ETF for inflows this week was the UVIX, a leveraged long volatility fund, which gathered $42 million despite its poor performance, suggesting significant bottom-fishing. The VXX, another long volatility product, saw the largest outflows of $67 million, highlighting a split in investor conviction regarding the path of volatility.

Inflows
Ticker Fund Name 5-Day Flow
UVIX 2x Long VIX Futures ETF $42M
SVIX -1x Short VIX Futures ETF $40M
UVXY ProShares Ultra VIX Short-Term Futures ETF $33M
VIXY ProShares VIX Short-Term Futures ETF $18M
DBMF IMGP DBi Managed Futures Strategy ETF $16M
Outflows
VXX iPath Series B S&P 500 VIX Short-Term Futures ETN ($67M)
QAI NYLI Hedge Multi-Strategy Tracker ETF ($12M)
CTA Simplify Managed Futures Strategy ETF ($10M)
QIS Simplify Multi-QIS Alternative ETF ($1M)
VYLD Inverse Vix Short-Term Futures ETN $0M

Issuer League Table Update

IM leads the issuer league table with a 20.18% market share and $1.99 billion in AUM, closely followed by Simplify with 19.13%. Volatility Shares had the strongest week for inflows, gathering $82 million, while iPath experienced the largest outflows of $67 million.

Top 5 Issuers by AUM

Brand Fund Count AUM AUM Market Share
IM 1 $1.99B 20.18%
Simplify 3 $1.88B 19.13%
New York Life Investments 2 $1.08B 10.96%
ProShares 6 $1.01B 10.27%
iPath 2 $0.73B 7.45%

Top & Bottom 3 Issuers by 5-Day Flow

Inflows
Brand 5-Day Flow
Volatility Shares $82M
ProShares $50M
IM $16M
Outflows
iPath ($67M)
New York Life Investments ($12M)
Simplify ($9M)

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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.