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Every Single VIX ETP (Long And Short) Lost Money In 2015

Just one month ago, in The Current VIX ETP Landscape , I plotted all twenty-four VIX exchange-traded products with respect to leverage and maturity, using leverage on the Y-axis and maturity on the X-axis. I also included a half dozen VIX strategy ETPs that have no easily discernable point on the leverage-maturity grid. Depending on how finely you wish to split hairs, these twenty-four ETPs cover approximately seventeen unique ways to trade volatility long and short, across various maturities and according to a wide variety of strategic approaches. The big story is that in 2015, not one of those VIX ETPs was profitable. In fact, the mean VIX ETP lost over 21% for the year. This means that in those instances where there are long and inverse pairs – notably the iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA: VXX ) and the V elocityShares Daily Inverse VIX Short-Term ETN (NASDAQ: XIV ) as well as the iPath S&P 500 VIX Mid-Term Futures ETN (NYSEARCA: VXZ ) and the VelocityShares Daily Inverse VIX Medium-Term ETN (NASDAQ: ZIV ) – both the long and short version of the same volatility trading idea lost money. This all happened in a year in which the VIX fell a mere 5.2% from the beginning to the end of the year. While contango was a factor during the course of the year, contango affecting the front month and second month VIX futures averaged a relatively mild 4.3% per month during the year, while contango between the fourth month and seventh month was slightly above average at 1.6% per month. The biggest culprit affecting the declines were the huge moves in volatility, with three one-day VIX spikes of greater than 30% occurring in the space of two months. The large volatility spikes had a considerable impact on end-of-day rebalancing, leading to volatility compounding price decay. One last technical note, with respect to the AccuShares Spot CBOE VIX Up Shares ETF (NASDAQ: VXUP ) and the AccuShares Spot CBOE VIX Down Class Shares ETF (NASDAQ: VXDN ) products, I have yet to see AccuShares or anyone else attempt to calculate the performance of these products for 2015. Given the chaos created by regular, special and corrective distributions, in addition to reverse splits and stock dividends, calculating performance for these two ETPs is not a project I have the inclination to tackle right now. That being said, until I see the calculations, I cannot be 100% sure that VXUP had a losing year in 2015. Consequently, in the event that VXUP did post a gain, this would be a good time for AccuShares to post some performance data and claim at least one public relations victory in this space. To the broader audience, if you happen to be sitting on an idea for a VIX or volatility-based ETP that would have been a winner in 2015, this is an interesting time to consider moving forward with that idea. Looking ahead, I will have a lot more to say about VIX ETP strategies, VIX ETP performance and related subject going forward. [source(s): VIX and More]

2015 Asset Class Performance — Indexes, Sectors, Bonds, Commodities, Countries And Currencies

Monday marks the first day of trading in 2016, but before moving on, below is a look at the performance of various asset classes (price change, not total return) for the full year 2015 using key ETFs traded on U.S. exchanges. While December ended up solidly in the red for U.S. equities, if it weren’t for a strong Q4, major indices would have finished much deeper in negative territory than they did. Growth ETFs outperformed value ETFs by a wide margin in 2015, while large-caps outperformed small-caps as well. Looking at the ten S&P 500 sectors, we saw gains for Consumer Discretionary, Consumer Staples, Health Care and Technology, and losses for Financials, Industrials, Materials, Telecom and Utilities. Energy was in its own category altogether with a decline of 23.8%. For two years in a row now, the Energy sector has underperformed the S&P 500 by more than 20 percentage points. That has only happened to a sector versus the market five other times. Outside of the U.S., Brazil finished down the most with a decline of 43.45%. Canada was actually the second worst of the country ETFs shown with a decline of 25.5%. Japan was the biggest gainer at +7.83%. The broad commodities ETF ended 2015 down 27.59%, led lower by oil and natural gas. Gold and silver didn’t help either, though, as both fell 10%+. Finally, Treasury ETFs all closed lower than where they started the year, although on a total return basis they were slightly positive. Best of luck to all for a prosperous 2016!